The €100bn project will focus on bandwidth, security and response times, minister for transport and digital infrastructure Alexander Dobrindt said.
Developments including virtual reality and the internet of things will bring enormous data growth, and the need for more bandwidth, reliable real-time transmission and intelligent networks, Dobrindt said.
The network will use "the most advanced technologies, such as fibre and the future 5G mobile communications standard", he said.
The Ministry for Transport and Digital services already invests around €4 billion a year to bring broadband to underserved regions. From 2018 onwards, the department will invest a further €3 billion a year, Dobrindt said.
Netzallianz Digitales Deutschland was founded in in March 2014 and brings together most of Germany's major telecommunications firms. 75.5% of households now have fast internet speeds of at least 50 Megabits per second, an increase of 26% since the alliance was established, he said.
Germany's education department announced in October 2016 that it plans to invest €5 billion over the next five years to provide faster internet connections, WiFi and tablet computers to schools and colleges.
The government will make the money available to the country's federal states, which are responsible for education, education minister Johanna Wanka said.