Appointments include Heiko Maas as foreign minister and Olaf Scholz as finance minister.
Germany's second biggest party, the Social Democrats, on Friday named their ministers in Chancellor Angela Merkel's next government, completing a cabinet lineup in which they snatched the trophy finance and foreign affairs portfolios.
As justice minister, he brought in laws forcing social media companies like Facebook and Twitter to remove hate speech from their sites and is a vocal critic of the far-right Alternative for Germany (AfD).
The law was seen as an global test case but is set to be amended in response to criticism that too much content is being blocked.
The party declined to comment on the reports about Maas, a Catholic from Saarland on the French border, who was one of the front runners.
"I believe that he will be a very good foreign minister", she said, adding that Germany needs to play a more active role in global politics.
The decision was made by the Social Democratic Party's (SPD) leadership, Gabriel said, adding that he was told of the decision late on Wednesday.
Mr Gabriel is said to have a broken relationship with Mr Scholz and Ms Nahles.
At a news conference with his Bosnian counterpart, Gabriel expressed support for Maas. Katarina Barley, 49, family minister since 2017 who is a passionate pro-European with a British father, and Thomas Oppermann, 63, current vice president of the Bundestag, are also in the running.
Franziksa Giffey, the former mayor of Berlin's Neukölln district, will become family minister, and Svenja Schulze, secretary-general of the SPD's state party in North Rhine-Westphalia, will take over the environment ministry, replacing Barbara Hendricks.
Merkel's Christian Democrats and Bavarian Christian Social Union allies have already announced their choices of cabinet ministers.