Estimated figures from its Federal Statistical Office said gross domestic product was 1.9% higher last year than in 2015.
The annual figure is based on an early estimated that growth was around 0.5% in the fourth quarter.
However, the actual fourth quarter figure will not be released until early next month.
The 1.9% figure for 2016 was slightly above expectations, and builds on the growth rate of 1.6% in 2014 and 1.7% for 2015.
Germany's exports were up by 2.4%, but that was outstripped by import growth of 3.4%.
Household spending grew by 2%, while government spending was up by 4.2%, partly because of an increase in spending on assisting the vast numbers of asylum seekers the country has taken on.
The country has enjoyed seven years of economic growth. Unusually for a developed country, it has a budget surplus.
Last year's totalled 0.6% of gross domestic product, down a touch on 2015's 0.7%.
Germany's economy stepped up its pace of growth in 2016, thanks to higher household and government spending.