Following talks in London with Foreign Secretary Boris Johnson, Sigmar Gabriel said there was no desire to "punish" the UK for voting to leave the EU.
But while he said that both sides would lose out if there was no deal, it would be the UK that suffered most.
"Having no deal is not the best idea for Britain and the European Union," he said. "It would bring a burden on both sides, for the Brits as well as the Europeans.
"My personal opinion is that the burden for the Brits is higher than for the Europeans."
Mr Gabriel said that Germany wanted to see a deal which held Britain "as close as possible" to the EU.
However, he stressed that the UK could not expect to enjoy the same advantages after Brexit as it did as a member.
"Of course we want to see negotiations about Brexit being fair," he said. "Fair for Britain, but also from our point of view, fair for the remaining 27 members of the European Union.
"No-one should be left with the impression that the advantages of membership of the European Union can be used by people who are not members of the European Union."
Mr Gabriel acknowledged that the negotiations would be "difficult" but said he was "very optimistic" that they could achieve a successful outcome.
"The objective has to be to work for a good relationship because we will need to relay on each other in the future," he said.
"Our economies are closely interlinked. We need to rely on each other because we want to maintain the friendship and partnership that we have developed over the years."
He said that the remaining member states would need to stand together in the Brexit negotiations.
"This is why we will be focusing on ensuring the cohesion and unity of the 27 member states of the European Union," he said. "Of course we want to ensure that the 27 stand together and stand united."