Olaf Scholz will head a three-party coalition with broad plans for Germany’s transition to a green economy, under a deal to end 16 years of government led by Angela Merkel.
Almost two months after his Social Democrat party won federal elections, he will form a coalition government with the Greens and the pro-business Free Democrats.
Climate protection is an important component of the coalition agreement.
The parties hope to eliminate coal use by 2030, eight years ahead of schedule.
They will also aim to use 2% of German territory for wind power and will concentrate on hydrogen-based energy. The parties want renewable energy to supply 80 percent of electricity by 2030.
There are also plans to legalise the sale of cannabis in licenced establishments, with quality and distribution controls.
Germany is Europe’s largest economy, so the new government’s decisions will have a significant impact on its neighbours.