The head of the Federal Office for Radiation Protection, Wolfram Koenig, said sealing the Morsleben waste depot in Saxony-Anhalt state could take up to 20 years and will cost the federal government about $2.5 billion.
State authorities must also approve the plan, which could delay the start of the work until as late as 2009, Koenig added, saying the facility would be the first anywhere in the world to be sealed for good.
The underground chambers at Morsleben have stored East German nuclear waste since 1971, and began accepting waste from the west in 1994.
A court decision in 1998 halted operations at the site, which contains some 37,000 cubic metres of waste.
Koenig's agency has carried out filling work since 2001 to avert the risk of collapse in two chambers used for low- and medium-level radioactive waste and the government has pledged to close it, citing safety concerns.
No nuclear power
Chancellor Gerhard Schroeder's government plans to shut down all Germany's nuclear power stations by around 2020.
But it has put off a decision on the location of a central, permanent storage site until as late as 2030.
Opposition conservatives hoping to win Sunday's parliamentary election have pledged to allow nuclear power plants to stay open longer, provided they meet safety standards.
Koenig said officials had included the possible impact of future ice ages in calculating that the waste at Morsleben would be safe for about 150,000 years.