Jens Spahn proposed punishing those carrying out so-called conversion therapy on under-18s with up to a year in prison.
Germany's health minister submitted a draft law to ban so-called conversion therapy for minors on Monday, as a global movement to end discredited practices aiming to change a person's gender identity or sexual orientation gathers pace.
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The bill proposed by Jens Spahn, who is openly gay, would punish those carrying out conversion therapy on under-18s, or coercing, deceiving or threatening anyone older into such treatment, by up to a year in prison.
Advertising or offering conversion therapy would carry a fine of 30,000 euros ($33,489).
"Homosexuality is not a disease. Therefore, even the term therapy is misleading," Spahn said in an emailed statement.
"This supposed therapy makes you sick and not healthy. And a ban is also an important social signal to anyone who struggles with their homosexuality: you are okay the way you are."
Conversion therapies range from counselling to hypnosis and electric shock therapy and have been widely condemned by medical associations around the world as ineffective and detrimental to mental health.
Worldwide, Malta, Ecuador, Brazil and Taiwan have banned conversion therapy, according to OutRight Action International, an LGBT+ advocacy group. Britain, parts of Canada and Australia are also mulling bans.
Eighteen U.S. states outlaw conversion therapy for minors, according to advocacy group Born Perfect. But in September, New York City began repealing its ban to avert a legal challenge by a conservative Christian group.
The draft German law stated that the risks conversion therapy pose to people's health, and the right to determine one's sexual orientation and gender identity, outweighed concerns about religious freedom.
"It is clear that such measures are associated with significant risks of depression, anxiety or loss of sexual feelings," the draft said.
"The suicide risk of participants in so-called conversion therapies increases significantly."
A survey by U.S. suicide-prevention group The Trevor Project found 42% of LGBT+ youth who underwent conversion therapy had reported a suicide attempt in the last year.
"Bans go a long way in changing the societal perceptions which drive the existence of 'conversion therapy'," Jessica Stern, the executive director of Outright Action International, said.
"They send a powerful message that LGBTIQ people are not in need of change or cure."
However, transgender campaigners said the phrase "self-determined gender identity" in the draft law was new and thus needed to be defined more narrowly to protect trans people.
"Whenever you can't find a definition anywhere else the law's text is likely to be attacked," Petra Weitzel of DGTI, a trans and intersex advocacy group, who took part in a consultation on the draft law, said by email.
"Evangelical groups (are likely to argue) that something like self determination and gender identity among minors doesn't exist."
There is no timetable yet for the proposed law to be considered by parliament, but a final vote is likely to be next year, a spokesman for Germany's ministry of health said.