“The German passport will be available as recognition of successful integration and not as an incentive for illegal migration,” he said.
Merz’s coalition has taken a hard line on immigration, seeking to combat the growing popularity of the far-right Alternative for Germany, which came second in February’s general election.
Attitudes towards migration have hardened in recent years in Germany, particularly in areas where critics argue they have placed strains on public services.
A total of 450 lawmakers voted to repeal the law - including those from the SPD and AfD -- while 134 voted against the measure.
The SPD, junior partners in Merz’s coalition, defended supporting repealing the fast-track programme, arguing it was rarely used.
The new Government has left in place other key aspects of the previous coalition’s immigration reforms.
This includes lowering the number of years before a migrant can apply for German citizenship to five, from eight previously, and allowing dual citizenship in most cases.
-Agence France-Presse