Polling stations opened at 8 a.m. local time (0600 UTC) on Sunday at 88,000 locations across Germany.
Some 61.5 million people are eligible to cast their ballots in the long-awaited election, in which Chancellor Angela Merkel's conservative Christian Democratic Union (CDU), along with its Bavarian sister party the Christian Social Union (CSU), is projected to win the largest share of votes.
Merkel cast her vote at 2:30 p.m. She even showed her ID card at the polling station.
Opinion polls put the CDU/CSU bloc's popularity at 34-36 percent, ahead of the Social Democrats (SPD)'s 21-22 percent - a lead that suggests Merkel's victory is all but assured. If the polls are to be believed, the 2017 election will also see a far-right party, the Alternative for Germany (AfD), win seats in the Bundestag.
First projections of the election results are expected when the polls close at 6 p.m.
In the capital Berlin, turnout was at less than 30 percent as of midday, DW's Kate Brady reports.
DW's Kathleen Schuster reports from the western city of Cologne, Germany's fourth-largest city, which is located in the country's most populous state, North Rhine-Westphalia. Turnout as of midday is up three percent there compared to 2013.
People are also casting their votes in southeast Cologne, where the far-right AfD garnered eight percent of the vote in state elections in May.
Steinmeier: 'Go and vote!'
German President Frank-Walter Steinmeier on Sunday issued an appeal to citizens to get out and cast their ballots.
"Voting is a civic duty. Go and vote!" the former foreign minister wrote in an opinion piece published in the Bild am Sonntag newspaper.
"Every vote counts - your vote counts," Steinmeier said. "People who don't vote allow others to decide the future of our country."
Turnout is expected to be higher than the 2013 participation rate of 71.5 percent. As of 2 p.m. nationwide voter turnout stood at 41.1 percent, compared to 41.4 percent for the same time in 2013, according to the Federal Statistics Office.
Listen to what some voters told DW about their concerns in this election:
One-third of voters are older than 60, meaning the German electorate has never been this old. The number of first-time voters has remained stable at around 3 million.
Read more: Will non-voters decide the outcome?
The return of the far-right and FDP
Although another Merkel mandate at the chancellery may appear a foregone conclusion, her CDU/CSU party would still in all likelihood need to cobble together a coalition to lead government. To that end, the results of several smaller parties will be key.
The far-right populist AfD was polling at 10 to 13 percent, which would put it in third place behind the two biggest parties and give it more seats in the Bundestag than either the Left party or the Greens.
Despite a string of controversies, including party co-leader Alexander Gauland saying that there were some aspects of World War II of which Germany should be proud, it seems that the AfD's anti-immigration, anti-Islam positions have struck a chord with some voters.
The fate of the pro-business Free Democrats (FDP) will also be significant. In 2013, Merkel's preferred coalition partner failed to gain the five percent of the vote needed to enter the Bundestag. Banking on charismatic party leader Christian Lindner, the FDP looked poised to make a comeback with current polling hovering around 9.5 percent.
Nevertheless, even such a victory might not be enough for Merkel. In order to not have a minority government, German coalitions seek a 50 percent or higher mandate, and the CDU and FDP together might not be able to clear that hurdle. This would leave smaller parties like the Greens, and - though less likely, the Left - as power brokers in the coalition talks that will follow the election. As for the AfD, all of Germany's other major parties have said they will refuse to govern with the far-right newcomer.
In final push, Merkel and Schulz combat voter apathy
Merkel's SPD challenger, Martin Schulz, cast his ballot early Sunday in his home town of Würselen in western Germany, telling reporters he hoped "as many people as possible will make use of their right to vote and strengthen a democratic future of the Federal Republic of Germany."
In his final campaign event in Aachen on Saturday, Schulz tried a last-ditch attempt to save his party from the historic losses the polls appear to foretell.
"She wants to keep the past, I want to shape the future," he told the excited crowd, before referring to the AfD as the "gravediggers of democracy" and urging Germans to use their vote to keep the far-right from gaining ground.
Merkel, who has campaigned on her record as chancellor over the past 12 years while stressing Germany's low unemployment rate and strong economic growth, made similar comments.
"My request to everyone is that they vote, and vote for those parties that adhere 100 percent to our constitution," said Merkel, highlighting fears that low voter turnout could lead to major gains for the AfD.
Germany enjoys a relatively high turnout compared to other countries: in 2013, 71.5 percent of the electorate cast their ballots in the federal election. However, with many assuming Merkel's defense of the status quo will emerge victorious, on top of an SPD campaign that failed to inspire, it remains to be seen how many will feel compelled to head to the ballot box this time around.
es,nm, ng/kl (AFP, Reuters, AP, dpa)