State Justice minister Thomas Heilmann's announcement Wednesday came after Berlin's Jewish Hospital asked for clarification following a June ruling by a regional court in Cologne.
That ruling said circumcision amounted to causing criminal bodily harm to a child. The court decision didn't amount to a ban on the procedure and wasn't binding for other courts, but it raised fears among Jews and Muslims of possible prosecutions.
The federal government is drafting new legislation clarifying the issue, but Heilmann says he felt it necessary to allay fears in this "difficult transitional period."
A German rabbi has been criminally charged for performing a circumcision, committing what the indictment calls "bodily harm."
The lawsuit against David Goldberg, who is a mohel and the Rabbi of the city of Hof Saale in Bavaria, is the first known case following the anti-circumcision ruling.
German Chancellor Angela Merkel reportedly told her party recently the country risked becoming a "laughingstock" over a court ruling calling religious circumcision a criminal act.
The mass-circulation daily Bild said in an article that Merkel warned the board of her conservative Christian Democratic Union (CDU) that Germany must restore legal protection for circumcision.
"I do not want Germany to be the only country in the world in which Jews cannot practice their rites," Bild quoted Merkel as saying, citing several CDU members who attended the meeting.
"Otherwise we would make ourselves a laughing stock among nations."