The EU member also announced plans for tougher quarantine rules as the country’s daily coronavirus cases continue to surge.
"It has turned out that a disproportionately high number of travelers returning (from high risk areas) tested positive," German Chancellor Angela Merkel told reporters following a meeting with leaders of Germany's 16 states.
Despite recent upticks in coronavirus cases, Germany has kept the number of its Covid-19 cases and deaths relatively low compared with other large European countries.
Germany recorded 237,936 coronavirus cases and 9,285 Covid-19 deaths as of August 27.
Regardless, the number of daily cases has risen steadily since early July and more alarming, it has accelerated in recent weeks.
In recent weeks, outbreaks traced back to weddings, family gatherings, and parties at beach destinations abroad have made headlines in local media, leading to calls to crack down on events at which social distancing rules may not be observed.
Likely from October, anyone who has to quarantine because they traveled to a high-risk country will no longer be entitled to compensation for lost wages, Merkel said.
Germany has a list of high risk countries and regions, which includes most countries outside of Europe.
But it has recently added a number of regions within the European Union, including Paris, France's Cote d'Azur region, and most of Spain.
Germany is also extending a ban on major events such as concerts, sports, and festivals, until at least the end of the year. The ban was previously set to run out at the end of October.
States will also impose stricter limits on gatherings in private homes, and 15 of Germany's 16 states agreed to a minimum fine of €50 ($59) for failing to wear a mask where it is mandatory, like in grocery stores or on public transportation.
"Corona is fully back in Germany," Bavarian state premier Markus Soeder said at a joint news conference with Merkel.
"It doesn't make sense to have audiences at soccer matches again from September."
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