Gerd Mueller has said Germany has pledged to spend 150 million euros ($189 million) t help migrants return home.
The aid fund will benefit both failed asylum seekers and migrants who choose to return to their home countries.
"For the next three years, we will put aside 50 million euros a year for this return programme," minister Gerd Mueller told Augsburger Allgemeine daily.
The funds will be made available to Iraqis, Afghans and migrants from the Balkans.
The aid will help those migrants "make a new start" in their home countries, Mueller said.
"We can offer them education, professional training, employment and social benefits."
Since receiving 900,000 asylum requests in 2015, Germany has tightened up its borders and regulations for would be migrants.
Under pressure from her Christian Democratic Union party, Chancellor Angela Merkel has got tougher on immigration ahead of her bid to win a fourth term in next year's elections, vowing never again to allow such a wave of arrivals from Iraq, Syria and Afghanistan.
Her previous "open door" policy towards refugees has drawn increasing criticism, in part due to a number of high profile crimes committed by recently-arrived migrants.
Last week a teenage Afghan asylum seeker was arrested on suspicion of the rape and murder of a German student.
Last month, German police arrested seven Afghan asylum seekers on suspicion of repeatedly raping an Iranian teenager in a refugee camp.