Scholz has hinted at a coalition deal on this for a few weeks, so it's no big surprise. However there were some rumblings that it could be blocked. In any case, the question for now is how long they're extended for.
In the short term, this will relieve some of the pressure on natural gas and electricity prices this winter. It's good news for the euro, at the margins, but would have been 95% priced in.
An interesting development was China banning the re-selling of LNG to Europe this weekend. That could be a big problem when it comes to securing supplies mid-winter or refilling storage next year.
Update: The extension is only until April 15, rather than a longer-term extension that some had pushed for. On the margin, this simply kicks the can down the road by four months.