The Nationale Cyber-Abwehrzentrum is a joint venture by the federal offices of information security, civil protection and protection of the constitution, according to local reports.
These agencies are to be joined by the police, federal intelligence service and the armed forces in coming months.
The protection of critical infrastructure is at the heart of cyber security, said Federal Interior Minister Hans-Peter Friedrich.
"Stuxnet and the most recent example of the hacker attack on the French nuclear company EDF have shown that IT systems represent critical infrastructure in the context of cyber attacks," Hans-Peter Friedrich said.
The German Interior Ministry announced a sharp rise in cyber attacks against critical infrastructure in 2010, nearly double the number in the previous year.
The national cyber defence centre is an important step for the advancement of cyber-security in Germany, said BSI president Michael Hange.
Germany is following the lead of other countries that have set up similar centres, such as UK's Cyber Security Operations Centre (CSOC), the US Cyber Command, and China's cyber defence programme.
In May, UK armed forces minister Nick Harvey revealed the UK is working on a cyber-weapon programme with offensive capabilities to counter cyber warfare threats to national security.
Nick Harvey said action in cyberspace will form part of the future battlefield, and cyber weapons compromise an integral part of the country's armoury.
This story was first published by Computer Weekly