The news follows the scandal of the US National Security Agency’s surveillance programme, Prism.
Germany’s foreign intelligence agency BND is reportedly planning to invest €100m to expand its internet surveillance programme.
German news weekly Der Spiegel reported that BND plans to expand surveillance programme to cover 20% of all communications between Germany and foreign countries.
The agency plans to hire 100 new employees on a technical reconnaissance team.
Germany Interior Minister Hans-Peter Friedrich told Der Spiegel that: "We have to balance out a loss of control over the communication of criminals through new legal and technological means."
"Of course our intelligence agencies also have to be present on the Internet," Friedrich said.
The news comes more than a week after the Guardian and the Washington Post have reported that the US National Security Agency and FBI have tapped directly into the servers of nine major US tech firms to collect the users data.
Major firms which were tapped under US surveillance programme, Prism, include Microsoft, Yahoo, Google, Facebook, Apple, PalTalk, AOL, Skype and YouTube.