The $890,000 memorial to gay victims will be located in Berlin's Tiergarten Park, across from the Memorial to the Murdered Jews of Europe, Culture Minister Bernd Neumann said.
Construction on another memorial to honor Roma and Sinti, or Gypsy, victims of the Nazis also is to begin this year.
Homosexuality was banned under the Nazis. Tens of thousands of people - primarily men - were arrested and many were sent to concentration camps.
Some 220,000 to 500,000 Gypsies were killed during the Nazi Holocaust, in addition to some 6 million Jews.
The Memorial to the Murdered Jews of Europe - some 2,700 massive slabs of concrete lined up to form a labyrinth of rising and falling pathways - opened in central Berlin in 2005.
Already, cracks in the slabs will need to be repaired at costs of up to $300,000, experts say. The memorial cost more than $41 million to build.