While sex during work hours will continue to be considered a "disruption of service operations", the new ruling is more liberal on what soldiers do during their free time.
Provided it involves two consenting adults, the new regulation permits "both heterosexual and homosexual relationships and activities", writes Bild daily.
Differences in rank are also considered no obstacle.
The new rules also apply to troops stationed in the Balkans and in Afghanistan.
They even call for commanders to use "organisationsal and other measures" to provide "room for personal development."
The new directive comes as a welcome change for the 253,000 men and 10,600 women serving in German forces.
But it still means they have to be discreet about what they do, making sure none of their activities violates their "soldier's duty to behave respectably".
