In 2017, NATO deployed four multinational battalions to Poland and the Baltic states as a counter against possible Russian action following its 2014 annexation of Crimea from Ukraine.
Germany leads the NATO battalion in Lithuania comprising 1,200 troops from 10 countries.
"We're going to invest in the long-term engagement," Ursula von der Leyen told reporters, adding that Berlin would invest in "common barracks and training fields" in Lithuania until 2021.
Lithuania's defence minister Raimundas Karoblis hailed Germany's spending plans as evidence of commitment to the NATO deployment.
"We have heard very officially, very clearly at the political level.. that Germany is for the long run here and will stay here as long as the security situation will demand it," Karoblis said.
The other three NATO battalions deployed in 2017 are based in Estonia, Latvia and Poland and are led by Britain, Canada and the United States, respectively.
The three Baltic states, with a combined population of just six million people, were occupied and annexed by Moscow during World War II. They broke free from the Soviet Union in 1991 and joined both the European Union and NATO in 2004.
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