Speaking during a visit to Berlin by British Prime Minister Theresa May, the German leader stressed that negotiations on a "Brexit" could only begin when London triggered the formal mechanism to leave the bloc.
"It is in all of our interests for Britain to apply for the exit with a very well-defined negotiating position," said Merkel, who is expected to play a pivotal role in the talks.
May, on her first foreign trip since taking office in the wake of Britain's seismic Brexit referendum, stressed that Britain would not ask to leave the EU before the end of 2016 in order to plan a "sensible and orderly departure".
May has repeatedly asked for patience as her new government maps out its strategy for ending its 43-year-old membership of the EU despite some EU countries wanting Britain out of the bloc as soon as possible.
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"No one wants things to be up in the air -- neither Britain nor the member states of the EU," Merkel said.
"If we look at all matters and challenges facing us, it's most important to have Britain as a partner and we will do so and then negotiate on Britain leaving," she added.
Merkel has warned that Britain cannot have continued access to the single market while restricting the freedom of EU citizens to emigrate to Britain -- a key issue in the June 23 referendum.
May avoided giving details in her first parliamentary question session in London earlier this week -- a time-honoured ritual seen as a test of British political leadership.
Commentators have drawn comparisons between Merkel and May: both pastors' daughters with supportive husbands, happy to stay out of the limelight, who rose to become leaders of centre-right parties.