The country's Muslim community estimates that only about 50 women there wear the niqab or a variation on the niqab, the burqa.
The niqab covers the entire face except for a slit or hole for the eyes.
The burqa, which covers the entire body and face, except for a grille over the eyes, is common to Afghanistan and some parts of Pakistan and northern India.
Verdonk said: "From a security standpoint, people should always be recognisable and from the standpoint of integration, we think people should be able to communicate with one another."
Dutch Muslim groups have complained that a ban would make the country's one million Muslims feel more victimised and alienated, regardless of whether they approve of the clothing or not.
"This will just lead to more girls saying 'Hey, I'm also going to wear a burqa as a protest'," Naima Azough, a member of parliament from the opposition Green Left, told an election campaign meeting for fellow members of the Moroccan community.
Other Dutch Muslims said the ban was over the top, ill-conceived and infringed religious rights.
"They are going to have to find a better argument than security. It is an infringement on the freedom of religion," said Ahmed Markouch, a Moroccan mosques representative.
He predicted that the bill would go down badly with the country's sizeable Muslim population, "because it comes from Verdonk, not because they are in favour of the burqa".
"The fuss is much bigger than the number of people concerned"
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The debate on niqabs and whether they hinder Muslim integration has gathered momentum across Europe. Several countries in Europe have already outlawed them in specific places.
The Dutch justice ministry said: "The cabinet finds it undesirable that garments covering the face, including the burqa, should be worn in public in view of public order, and the security and protection of fellow citizens."
Last December Dutch lawmakers voted in favour of a proposal by politician Geert Wilders to outlaw face-coverings and asked Verdonk to examine the feasibility of such a ban.
Because niqabs were worn for religious reasons, Verdonk had feared new legislation could come into conflict with religious freedom laws. But she said on Friday that this was not the case.
Job Cohen, the Labour mayor of Amsterdam, said he opposed face veils in schools and public buildings, and said women wearing one who failed to get a job should not expect welfare benefits.
"From the perspective of integration and communication, it is obviously very bad because you can't see each other so the fewer the better," he told foreign journalists.
"But actually hardly anybody wears one... The fuss is much bigger than the number of people concerned."
Since the murder of anti-immigration politician Pim Fortuyn in 2002, the Dutch have pushed through some of Europe's toughest entry and integration laws.
Social and religious tensions have escalated in the last few years, exacerbated by the murder of film director and Islam critic Theo van Gogh by a Dutch-Moroccan Muslim man in 2004.
Source: Al Jazeera and agencies