The Social Democrat on Tuesday said his low popularity ratings had led him to make way for his party colleague Martin Schulz, the former European Parliament president, as the top candidate in the race for the chancellery.
Gabriel, 57, now replaces as Germany's top diplomat Frank-Walter Steinmeier, who is set to take over the largely ceremonial post of federal president in mid-February.
Outgoing President Joachim Gauck formalised Gabriel's resignation as economy minister, a portfolio he hands over to Brigitte Zypries.
If the general election results in another left-right 'grand coalition' led by Merkel's party, Gabriel would be expected to stay on as foreign minister.
On his first trip as foreign minister, Gabriel will head to Paris tomorrow to meet his French counterpart Jean-Marc Ayrault.
"The partnership, close friendship and trust between Paris and Berlin is very important to Foreign Minister Gabriel too and that's why he is travelling to France right away," a ministry spokesman told reporters.
Gabriel hopes to visit the United States soon after the Senate confirmation and appointment of nominated Secretary of State Rex Tillerson, the spokesman added.
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