The number of new asylum requests in Germany fell by a dramatic 66% in March to about 20,000, according to the interior ministry.
"In December 2015, it was 120,000 people, in January 90,000, in February 60,000 and in March 20,000," Interior Minister Thomas de Maiziere said.
Last year Germany was said to have received more than one million migrants, although subsequent official data indicated that the real number was more likely to have been around 600,000.
Nevertheless, there had been a surge after Chancellor Merkel suspended EU asylum rules to permit Syrian refugees a safe haven in her country.
More recently, Germany has reintroduced temporary border controls and in March a number of eastern European countries closed their borders to refugees seeking to pass through on their way from Greece to Germany.
These factors, along with the controversial EU-Turkey agreement, have reduced the numbers.
"The number of asylum seekers who have come to us to request asylum and refugee status fell markedly in the first quarter," De Maiziere said.
The numbers for January-March were down to 170,000 compared to over 500,000 for October-December 2015, he said, citing data from the government's EASY initial registration system.
But he warned that "despite the positive development, it is too early to give a prediction for the full year".
"We don't know ... whether alternative routes will emerge, especially Libya-Italy, and how Italy would respond," the minister cautioned.
