Police are patrolling the protest as crowds gather in Washington Square for an anti-immigration rally following a spate of terror attacks in the country.
Holding banners saying ‘Merkel must go’, crowds waving flags have flocked to the public square and the hashtag #Merkelmussweg is being used by protesters online.
Counter-demonstrations are also being held by anti-fascist groups with police expecting up to 5,000 people to gather in the German capital.
Thousands of protesters are waving banners saying ‘Merkel must go’
Posters reading ‘Berlin! Better without Nazis’ have been seen as others walk around with t-shirts saying ‘The German Reich lives in us’.
Right-wing speakers will address the crowds demanding Merkel introduce a cap on the number of migrants and tough new security checks.
Chancellor Angela Merkel has increasingly come under fire for her refugee policy which has seen more than a million migrants enter Germany in the past year, many fleeing war in Afghanistan, Syria and Iraq.
Five attacks in Germany since July 18 have left 15 people dead, including four attackers, and dozens injured.
Officials say two of the attackers had links to Islamist militancy.
Merkel has been forced to defend her immigration policy, which many have linked to the attacks, and has refused to change it.
Earlier this week she set out a nine-point plan, including measures to recruit more staff for security agencies, and an early warning system for the radicalisation of refugees.
Bavaria’s state premier took aim at Merkel this afternoon.
Horst Seehofer, whose Christian Social Union is the Bavarian sister party of Merkel’s conservatives, said: “The problem is too big for that and the attempts at a solution thus far too unsatisfactory.
“Restrictions on immigration are a condition for security in this country.”
Jens Spahn, deputy finance minister and a senior member of Merkel’s conservatives, suggested a ban on the burka in Germany was “overdue” as he admitted Germany underestimated the migrant crisis.
He said: “A ban on the full body veil – that is the niqab and the burka – is overdue.
”My impression is that we all underestimated a year ago what would come upon us with this big refugee and migration movement.”
Germany is on high alert following a series of attacks and police arrested a 15-year-old boy in Stuttgart on suspicion of planning a terror attack on Wednesday.
Merkel faced more criticism on social media after failing to react until the next day – and 17 hours after US President Barack Obama – to the Munich shooting where an 18-year-old German-Iranian gunman killed nine people in a shooting on July 22.
Four passengers were injured on a train in an axe attack near Wurzburg on July 18.
The 17-year-old axeman was shot dead dead by police.
Authorities have said the refugee, who may have come from Afghanistan or Pakistan, had clear longer-term ties to Islamist extremist groups.
A Syrian asylum seeker blew himself up in Ansbach on July 25 outside a music festival killing himself and inuring 15 people.