The local media council said Arabic programming would add to the diversity of radio offerings in the German capital. Arabic speakers from more than 20 countries live in Berlin.
Berlin's first Arabic-language radio station will have the potential to reach more than 100,000 Arabic speakers living in the German capital.
The MABB media council for Berlin and the surrounding state of Brandenburg announced the approval of Radio Arabica on Thursday.
Read more: Germany needs immigrants to stay competitive
Radio Arabica's programming will cover life in Berlin, culture, news, comedy and sport. It will also play a mix of Arabic folk music, pop and modern music.
Hansjürgen Rosenbauer, the head of the MABB media council, praised the expansion of "diversity" in the radio landscape.
"Alongside a French, Russian, Turkish, British and American radio show, there will now be an offering for the Arabic population," Rosenbauer said.
Berlin has had an Arab population since 1960s and 1970s, when then-West Germany brought in Moroccans as "guest workers" to help rebuild the post-World War II economy.
In the 1980s and early 1990s, Lebanese and Palestinians fled to Germany during Lebanon's civil war.
The Iraq war in the 2000s and post-2015 migrant influx brought more Arabic speakers to the capital, mostly from Syria and Iraq.
According to statistics from 2017, there are around 133,000 people with an Arab background from more than 20 countries living in Berlin. They account for about 4% of the capital's population.