The initial rate of 8.50 euros corresponds to about 51% of the median wage, meaning Germany will pay its lowest earners more than Spain or the U.K., but less than France or Belgium.
The German government estimates that about two-thirds of the 3.7 million workers who will benefit directly are women.
Germany is one of the most productive leading economies, giving its exporters a powerful edge in world markets. That strength helped shield Germany from the worst of the eurozone crisis, supporting growth and jobs.
Some observers expect the minimum wage will have little impact on business in the short term, because the economy is performing well and employers have had time to adjust during months of public debate.
"It is still a significant political decision, however, as it signifies a shift away from the liberalizing labor market reforms of 2002-05 and could alter the structure of Germany's wage dynamics in the longer term," noted Evelyn Herrmann, European economist at BNP Paribas.