The findings – which experts say point strongly to Russian state involvement – are likely to increase tensions between Russia and the West.
German Chancellor Angela Merkel called the poisoning of Mr Navalny attempted murder and said it was meant to silence one of Russian President Vladimir Putin’s fiercest critics.
The Berlin hospital treating the dissident said he remains in a serious condition though he is improving.
It said that it expects a long recovery, and it still cannot rule out long-term consequences from the poisoning.
The German government said that testing by a special German military laboratory at the hospital’s request showed “proof without doubt of a chemical nerve agent from the Novichok group”.
“There are very serious questions now that only the Russian government can answer, and must answer,” Mrs Merkel said.
“He was meant to be silenced, and I condemn this in the strongest possible manner.”
Mr Navalny, a politician and corruption investigator who is one of Mr Putin’s fiercest critics, fell ill on a flight back to Moscow from Siberia on August 20 and was taken to hospital in the Siberian city Omsk after the plane made an emergency landing.
He was transferred two days later to Berlin’s Charite hospital, where doctors last week said initial tests indicated Mr Navalny had been poisoned.
British authorities identified Novichok as the poison used in 2018 on former Russian spy Sergei Skripal and his daughter Yulia in England.
The nerve agent is a cholinesterase inhibitor, part of the class of substances that doctors at Charite said last week had shown up in Mr Navalny’s system.
German foreign minister Heiko Maas said the Russian ambassador was summoned to his ministry on Wednesday and told in “unmistakable” terms of Germany’s call for the Navalny case to be investigated “in full and with full transparency”.
“We now know that there was an attack with a chemical nerve agent,” Mr Mass said.
“That makes it even more urgent to determine who was responsible in Russia and to hold them to account.”
The Kremlin remained tight-lipped and said it had not been informed, even though its ambassador in Berlin had been summoned.
The German government said it would inform its partners in the European Union and Nato about the test results.
Mr Maas said it wants to consult with them in light of the Russian response “on an appropriate joint response”.
Germany will also contact the Organisation for the Prohibition of Chemical Weapons.
“Russia itself should have a serious interest in good relations with its neighbours in Europe,” said Mr Maas.
“Now at the very latest, it is the time to make a decisive contribution towards this.”
In an update shortly after the government’s announcement, the Charite hospital said Mr Navalny is still in intensive care and remains on a ventilator.
But it said that he “continues to improve”.
“Recovery is likely to be lengthy,” it said in a statement.
“It is still too early to gauge the long-term effects which may arise in relation to this severe poisoning.”
Mr Navalny’s allies in Russia have insisted he was deliberately poisoned by the country’s authorities, accusations that the Kremlin rejected as “empty noise”.
“To poison Navalny with Novichok in 2020 would be exactly the same as leaving an autograph at a crime scene, like this one,” Mr Navalny’s longtime ally and strategist Leonid Volkov said in a tweet that featured a photo of Mr Putin’s name and a signature next to it.
The Russian doctors who treated Mr Navalny in Siberia repeatedly contested the German hospital’s poisoning conclusion, saying they had ruled out poisoning as a diagnosis and that their tests for cholinesterase inhibitors came back negative.
Novichok is a class of military-grade nerve agents developed by the Soviet Union at the end of the Cold War.
Western weapons experts say it was only ever manufactured in Russia.
After the Skripals were poisoned, Russia said the US, Britain and other Western countries acquired the expertise to make the nerve agent after the Soviet Union collapsed, and that the Novichok used in the attack could have come from them.
According to the Organisation for the Prohibition of Chemical Weapons, there is no record of Novichok having been declared by any nation that signed the chemical weapons convention.
“Unless you are working for the military, it is impossible to be accidentally exposed,” said Richard Parsons, a senior lecturer in biochemical toxicology at King’s College London.
“It is only dangerous when it is about to be used, ie, mixed together. It is unavailable from anywhere except the Russian military as far as I am aware.”
Britain charged two Russians – alleged to be agents of the Russian military intelligence service GRU – in absentia with the 2018 attack that left the Skripals in a critical condition and killed a local woman.
Russia has refused to extradite the men to the UK.
British police believe the nerve agent was smuggled to Britain in a counterfeit Nina Ricci perfume bottle and sprayed on the front door of Sergei Skripal’s house in Salisbury.
More than three months later, the bottle was found by a local man, 48-year-old Charlie Rowley.
He was admitted to hospital and his girlfriend, Dawn Sturgess, 44, died after being exposed to the contents.