Shauble argued that terror threats and public fear are intensifying because of international instability.
He said internal and external security measures were being raised as Germany and Europe experience times of change amid growing safety concerns, Efe news reported.
The German defence budget is to increase by $1.9 billion in 2017 and by $11.2 billion in 2020 while the security budget is to increase by $2.5 billion in 2020.
Schauble recognised that international military operations have not always been successful, but considered that the current situation could not end without any military interventions.
He said he would begin studying a progressive integration of armed forces within the European Union.
The decision comes after Germany suffered two terror attacks in July, in which 10 persons were killed and dozens injured.
