The plans would make it easier for defence firms to receive advance payments from the state to start production sooner, Defence Minister Boris Pistorius told journalists.

Contracts worth less than 443,000 euros ($520,000) will also be exempt from the full procurement process, up from a current limit of 15,000 euros, Pistorius said.

The threshold will rise to one million euros for construction projects, he added.

He said the proposed bill represented a "quantum leap" for Germany's armed forces, unblocking progress on about 12,000 procurement processes.

The changes will address the "jumble of regulations" that hindered "quickly building up Germany's defence readiness", he added.

Presenting the bill alongside Pistorius, Economy Minister Katherina Reiche said Germany needed to become "technologically and industrially stronger than potential aggressors".

"That is how we preserve peace," Reiche added.

Berlin has rushed to rearm itself following Russia's full-scale invasion of Ukraine, accelerating that process after US President Donald Trump urged Europe to take more responsibility for its own defence.

Chancellor Friedrich Merz has vowed to build Europe's "strongest conventional army" to counter a perceived threat from Moscow.

That represents a radical shift in a country with strong pacifist traditions due to its Nazi past.

Spending on Germany's armed forces is expected to reach 162 billion euros in 2029, more than triple Germany's defence budget before the war in Ukraine.

To become law, the cabinet's draft bill still needs to be passed by Germany's parliament.