Cruise, also one of the film's producers, is a member of the Church of Scientology which the German government does not recognize as a church. Berlin says it masquerades as a religion to make money, a charge Scientology leaders reject.
The decision drew a sharp response from Cruise's film producing partner, Paula Wagner, chief executive of United Artists Entertainment, who said Cruise's "personal beliefs have absolutely no bearing on the movie's plot, themes or content."
The U.S. actor will portray Colonel Claus von Stauffenberg, leader of the unsuccessful attempt to assassinate the Nazi dictator in July 1944 with a bomb hidden in a briefcase.
Defense Ministry spokesman Harald Kammerbauer said the film makers "will not be allowed to film at German military sites if Count Stauffenberg is played by Tom Cruise, who has publicly professed to being a member of the Scientology cult."
"In general, the Bundeswehr (German military) has a special interest in the serious and authentic portrayal of the events of July 20, 1944 and Stauffenberg's person," Kammerbauer said.
Stauffenberg had been deeply opposed to the Nazis' treatment of the Jews and planted a briefcase bomb under a table near Hitler in his "Wolf's Lair" headquarters on July 20, 1944. The bomb went off but only wounded the Fuehrer.
The film, slated for a 2008 release, will be directed by Bryan Singer and co-star Kenneth Branagh. It is called "Valkyrie" after Operation Valkyrie, the plot's codename.
In a statement, Wagner said von Stauffenberg is characterized as a "heroic and principled figure."
"We believe it (the film) will go a long way toward reminding the world that even within the ranks of the German military, there was real resistance to the Nazi regime," she said.
The main site of interest would be the "Bendlerblock" memorial inside the Defense Ministry complex in Berlin, where Stauffenberg and his co-conspirators hatched the plot and where he and his closest comrades were executed when it failed.
Kammerbauer said the ministry had not yet received official filming requests from the producers of "Valkyrie."
While Wagner did not cite requests for specific locations, she did add: "We believe Germany is the only place we can truly do the story justice."