Chancellor Olaf Scholz on Monday gave his support for all three of Germany's remaining nuclear power plants to stay operational until mid-April.
The move broke an impasse that caused a rift among his coalition partners as an energy crisis looms.
Russia's war in Ukraine and soaring power prices since have forced the government to rethink its plans to switch off nuclear energy by the end of the year,
"The legal basis will be created to allow the operation of the nuclear power plants Isar 2, Neckarwestheim 2 and Emsland beyond December 31, 2022, until April 15, 2023," Mr Scholz said in a letter to Cabinet ministers.
Economy Minister Robert Habeck from the traditionally anti-nuclear Greens had recently said two of the three plants would be kept "on standby" until next spring, to help secure energy supplies if needed.
But that did not go far enough for fellow coalition partner, the liberal FDP, who insisted the third plant, in Emsland in northern Germany, should also stay online.
Repeated rounds of talks in recent days failed to resolve the row, and Mr Scholz's statement on Monday evening indicates he pulled rank.
In the letter, the Chancellor from the centre-left Social Democrats said he was invoking his authority to issue a directive.
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The order "is a smack in the face for Habeck", wrote the top-selling Bild daily.
Even more embarrassing, it comes after the Greens at a congress this weekend backed Mr Habeck's position on decommissioning the Emsland plant.
The FDP celebrated Mr Scholz's decision to keep all three atomic plants online, although it fell short of their demand to extend their lifetimes until 2024.
Finance Minister Christian Lindner from the FDP, who has claimed that Germany needs to use every energy source it has to help bring down prices and keep the lights on in Europe's top economy, said Mr Scholz had "provided clarity".
"It is in the vital interest of our country and its economy that we maintain all power generation capacity this winter," Mr Lindner tweeted.
"We can create the legal basis together immediately. We will also work out viable solutions together for the winter of 2023-2024. People can count on that.".
Green party co-leader Ricarda Lang criticised Mr Scholz's decision, saying "the Emsland nuclear power plant is not needed for grid stability".
The final word on the matter had yet to be spoken, Ms Lang said. "We will have conversations about this," she wrote on Twitter.
But she did welcome that Mr Scholz had made it clear that Germany would "definitively" quit atomic power by mid-April and that "no new fuel rods will be procured".
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Environmental group Greenpeace, meanwhile, condemned Mr Scholz's move as "irresponsible".
"Extending the operating lives of nuclear power plants exposes us all to an unjustifiable risk," said Greenpeace Germany's executive director, Martin Kaiser.
Former chancellor Angela Merkel had pushed through Germany's nuclear exit after Japan's Fukushima disaster in 2011.
But Germany, which was heavily reliant on Russian gas and oil before Moscow's invasion of Ukraine, has been hit hard by the fallout from the war and the nation is now bracing for a painful recession.
The conflict has sent energy prices soaring and Russia in late August halted the flow of gas through the crucial Nord Stream 1 pipeline, leaving Germany racing to diversify energy supplies and build up reserves ahead of the colder winter months.
The country has even restarted some idled coal-fired power plants.
Climate activist Greta Thunberg last week said it was "a mistake" for Germany to press ahead with its nuclear exit while increasing its use of coal.
