The Federal Ministry for Cooperation and Development made the announcement on Wednesday.
"Only through rehabilitating critical infrastructure and investing in basic services in the place is it possible to create the conditions for longer-term reconstruction and development activities," read a statement.
Germany is a member of the US-led anti-ISIS coalition. Its parliament renewed force deployment for Iraq and Syria last month amid speculation that it would withdraw all forces because of the new government.
Ninety million euros will go to Iraq through the United Nations.
"The purpose is to enable to return of displaced Iraqis to lay the foundation for reconstruction in order to counter a resurgence of violence and extremism," added the statement.
The remaining 10 million euros will go to Raqqa and Deir ez-Zor in Syria to restore basic services because those areas are not under Syrian regime control and Berlin noted it will not fund projects in areas held by Bashar al-Assad.
Germany became involved in the ISIS conflict in 2015 at the request of the Iraqi government. It has worked through the UN's Funding Facility for Stabilization to support security forces and now stabilization and reconstruction in the country.
Berlin reduced its troop mandate for Erbil from 150 to 100 in September. It signaled that it would be shifting from direct military contributions to other forms of support.
As a NATO member, Germany is expected to contribute to the organization's future training efforts.
