Spahn, a member of Merkel's Christian Democrats (CDU) who does not shy away from criticising the chancellor, told the Deutschlandfunk public broadcaster:"The SPD must decide: either we rule together or some will try to play opposition within the government".
Merkel-led conservative-left coalition government is expected to take office following a vote at the German parliament on March 14.
Merkel was weakened by her 2015 decision to welcome hundreds of thousands of people seeking asylum, which helped fuel the rise of a far-right party that stole conservative voters.
The SPD initially vowed to rebuild in opposition, only agreeing to talks on a return to its loveless marriage with Merkel after her negotiations with two smaller parties collapsed in November, plunging Germany into political uncertainty.
"It's good news for Europe", Macron's office said.
With the party riven over its way forward, its leadership promised its more than 460,000 members the final say on any coalition deal.
The idea was to keep one of the most influential leaders, Merkel as the Chancellor in Berlin.More news: World pushes back on Trump's trade tariffs
Merkel's party, the Christian Social Union, had captured the most votes in national elections five months ago but hadn't been able to reach a coalition, which was necessary to run the government because it wasn't a majority.
More than 6 in 10 Germans said in a poll published on Monday they believe the coalition will serve a full four-year term.
The SPD's approval ended the five-month-long political stalemate and cleared way for Germany's new government after the September 24 Federal Parliament elections, in which both of the two blocs suffered the worst turnovers since 1949. The CDU/CSU and SPD have governed in a grand coalition since 2013.
The AfD, an anti-immigrant party, entered the federal parliament for the first time in September.
Meanwhile, Germany's deputy energy minister Rainer Baake has resigned from his post, citing his disappointment over the climate policy plans in the new coalition agreement. But crucially, at a congress this week, her party also formally appointed its new general secretary, Annegret Kramp-Karrenbauer, tapped by Merkel to kickstart the renewal process.
Kevin Kuehnert, head of the SPD's Jusos youth wing who campaigned for a "No" vote, is ready to call out any delay in implementing the hard-won coalition deal, which envisages eurozone reforms in partnership with France.
She added, "The new government has a lot of work ahead of it that needs to be started soon".