Foreign Minister Guido Westerwelle said Friday that ending the agreement was "a necessary and proper consequence of the recent debate about protecting personal privacy."
A government official says the move is largely symbolic and has no practical consequences for intelligence cooperation.
He spoke on condition of anonymity because he wasn't authorized to publicly discuss the issue.
The late 1960s agreement allowed the U.S. and Britain to ask the Germans to conduct surveillance operations within Germany to protect foreign troops stationed here.
Chancellor Angela Merkel raised the issue of alleged National Security Agency spying with President Barack Obama when he visited Berlin in June.
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