The German Cabinet approved a long-awaited bill Wednesday to modernize the country’s citizenship law.

Speaking at a news conference in Berlin, Interior Minister Nancy Faeser said the proposed legislation will simplify the naturalization process, and enable multiple citizenship for immigrants.

"We are introducing a modern immigration bill which would better serve our modern and diverse country. The new nationality law is one of the most important reforms of our coalition government. I am very pleased that we are now implementing this," she said.

According to the proposed bill, immigrants will have a right to German citizenship after five years of residence in the country, instead of the current eight years.

For immigrants who have shown outstanding academic or professional achievements, and have good language skills, this period will be reduced to three years.

The draft law will also enable immigrants to hold dual citizenship or multiple nationalities, which is currently not possible for most immigrants.

Children born in Germany to foreign parents will be able to acquire German citizenship if at least one parent has lived legally in the country for at least five years. These children will also be able to keep the citizenship of their parents.

Currently, over 12 million people in Germany – around 14% of the total population – do not possess German citizenship. Around 5.3 million of them have been living in the country for at least 10 years, according to official figures.

Reform of German citizenship law was a centerpiece of the coalition agreement, when Social Democrats, the Greens and liberal Free Democrats formed a three-way coalition government two years ago.

Chancellor Olaf Scholz has repeatedly said that speeding up the process of naturalization, allowing multiple citizenship for immigrants, would enhance integration, social and political participation.

The proposed bill requires parliamentary approval to become a law, and it is expected to be discussed at the Bundestag after the summer recess.