Merkel's conservatives, who had previously backed only a non-binding motion, would work with their Social Democrat (SPD) coalition partners and draw up a law, Volker Kauder, parliamentary floor leader of the Christian Democrats (CDU), was quoted by Reuters as saying.
The law, which has been discussed in Germany for a long time, would ensure a blanket rehabilitation of those viewed as traitors in the Nazi era and would go through parliament before the election in September, Kauder added.
Nazi military courts condemned about 30,000 people to death for desertion and treason during the war, and about two thirds of those were executed, according to German media outlets.
Historians say the Nazis used the treason charge to condemn soldiers and civilians to death for political resistance and for helping Jews.
The draft law could be drawn up in the next few days and parliament will be able to pass it by August 26, said Kauder.
"This is a big chance to undo this injustice," opposition Left party lawmaker Jan Korte was quoted as saying in the Financial Times Deutschland.
"64 years after the war, it is time to give a signal to families that the German parliament does not see their fathers and grandfathers as traitors."
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Good governance is not about crackpots getting their big chances.
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