The sources who spoke to Reuters gave no details on how much Chancellor Angela Merkel's government could boost its spending on items like infrastructure and education.
In November, amid pressure from European partners like France and Italy, Finance Minister Wolfgang Schaeuble announced plans to spend an extra 10 billion euros in 2016 and 2017.
Now Berlin is looking into increasing that sum, coalition sources said, without specifying by how much.
"The reason for this is the good budget situation, which means it is likely tax revenues will be higher than expected in the coming years too," said one of the sources.
In another sign that Merkel could be willing to put a bigger emphasis on spending, the government's annual economic report will be titled "Investing for the future of Germany and Europe", according to a draft version seen by Reuters.
The report, which is still being finalised and will be published on Jan. 28, has no figures included yet that would provide hints about how much the government is willing to increase spending.
However, the draft version reads: "To improve Europe's growth potential in a sustainable way, the German government aims for a triad of accelerated investments, ambitious structural reforms and growth-friendly consolidation."
This week, the finance ministry announced Germany had met the crucial target a year ahead of schedule, balancing the budget for the first time in almost half a century thanks to strong tax revenues and rock-bottom interest rates.
Other euro zone countries like France and Italy as well as International Monetary Fund chief Christine Lagarde have repeatedly urged Germany to use its room for fiscal manoeuvres to boost spending on infrastructure.
But German Finance Minister Wolfgang Schaeuble has brushed off such demands up to now, saying that "writing cheques" was no way to boost the European economy.
(Writing by Michael Nienaber; Editing by Mark Heinrich)
By Matthias Sobolewski and Gernot Heller
