Robert Habeck's law came into force in 2024, backed by the Greens in former chancellor Olaf Scholz's coalition, and stipulated that any new heating system must operate with at least 65-percent renewable energy.

But many Germans saw the ambitious environmental target as costly and overly bureaucratic, with a complex and too rapid implementation process.

"All types of heating are now possible again," the head of the conservatives' parliamentary group, Jens Spahn, alongside his social-democrat counterpart Matthias Miersch.

A draft bill should be finalised by early April, with the new legislation expected to be adopted before July 1.

"Heating will once again become a private matter," said Spahn.

"People will once again have the freedom to decide for themselves how they heat their homes. We are abolishing the constraints and unnecessary bureaucracy of Robert Habeck's old law."

Under the new agreement, only the introduction of a "bio quota" is planned.

With gas heating, for example, a certain percentage of so-called green gas -- climate-friendly biomethane -- will have to be mixed with natural gas.

It must be at least 10 percent from 2029, before being increased in three stages by 2040.

Environmental campaigners criticised the agreement, at a time when Germany risks falling behind its targets for tackling climate change from 2030 to 2045.

"With these changes, the government is giving a huge present to the fossil fuel industry, significantly weakening consumer protection and burying climate protection in the building sector," Greenpeace said.