Germany's foreign intelligence agency (BND) plans to spend 100 million euros expanding its monitoring of the Internet, the weekly Der Spiegel reported on Sunday, saying the money would go on staff and technology.
The report came two days before U.S. President Barack Obama was due to visit Berlin, where he was likely to face tough questions about U.S. spying methods.
Many Germans from the former communist east still recall the blanket surveillance carried out by the Stasi secret police, and when news of Washington's covert electronic spying programme PRISM broke last week, it caused outrage.
The BND was unavailable for comment.
Some German politicians criticised the plan, with Justice Minister Sabine Leutheusser-Schnarrenberger saying the answer to citizens' concerns about U.S. spying could not be "Let the Germans do it instead".