Chancellor Angela Merkel's spokesman, Steffen Seibert, said the legislation, which bans protests and introduces the "concept of foreign agent" into criminal law, will make life difficult for opposition activists and NGOs.
"The German government expresses its great concern about this law, which marks a turn-around from European values," he noted.
He spoke of "disappointment for Ukrainian citizens and the EU" and warned that this "will have consequences on EU-Ukrainian relations."
Pressed to be more concrete, Seibert said he did not want to pre-empt EU foreign ministers' talks on on the subject on Monday.
Another German official told this website that Berlin is not EU envisaging sanctions.
But he said it might favour a freeze on all ongoing EU-Ukraine talks, for instance, on visa-free travel.
Germany wants is keen to send a message to Yanukovych that his actions will have repercussions, especially if opposition activists are thrown in jail following adoption of this law.
German diplomats hope that a tough stance might make him think twice before signing the bill into life.
But according to Ukrainian media, he already signed it in secret on Friday.
The law is aimed at deterring people from joining the anti-Yanukovych and pro-EU protests which erupted in Kiev last November when he declined an EU pact in favour of a Russian bailout.
Under the new rules, people can be sentenced to up to 10 years in jail for blocking access to government buildings or face harsh fines for smaller offenses.
Germany's message on Friday was echoed by Sweden's foreign minister Carl Bildt, who said "there can be no business as usual with Kiev."
EU neighbourhood policy commissioner Stefan Fuele also told the Interfax news agency:
"Decisions adopted by the Verkhovna Rada are a disrespect of basic democratic principles and ... will have consequences for the partnership between the EU and Ukraine."