Prime Minister Lars Løkke Rasmussen said the plan - which contains a number of potentially controversial elements - was not about race or religion.
But too many Danish residents of non-Western backgrounds were not contributing to society, and the government was not prepared to accept that, the PM said according to newspaper Politiken.
Rasmussen made his comments as he, along with seven other ministers, presented the 'ghetto plan' in Mjølnerparken, an underprivileged area of Nørrebro in Copenhagen that is included on the Ministry of Transport and Housing's 'ghetto list'.
The plan - titled 'One Denmark without Parallel Societies: No Ghettos in 2030' - was also published on the government's website on Thursday.
"We still have time to turn around the trend, but we must act now," Rasmussen said Thursday according to Politiken's report.
The PM also stressed that most residents in Denmark with non-Danish backgrounds contribute positively to society.
But there are still too many people who are not, according to Rasmussen.
"It concerns me deeply that we might not be able to come together around Denmark. We should be able to recognise our country. There are places where I don't recognise what I'm seeing," he said according to Politiken.
Several elements of the government proposal were released to the media in the days prior to the official announcement on Thursday.
These include introducing tougher criminal punishments in specified areas, housing rules aimed at changing resident demographics, data sharing, compulsory daycare attendance in underprivileged areas and financial incentives for good performance.
In addition, the government also announced it wants to set aside 12 billion kroner (1.6 billion euros) to demolish and regenerate housing in underprivileged areas between 2019 and 2026.
"We will invest on turning underprivileged areas into entirely normal neighbourhoods. All ghettos must be gone by 2030," economy and interior minister Simon Emil Amitzbøll-Bille said at the press conference according to DR's report.
Another proposed law confirmed as part of the plan Thursday involves criminalising so-called "re-acculturation trips" (genopdragelsesrejser): trips abroad defined by the Ministry of Immigration as "sending children or young people under 18 years of age -- often against their will -- to their parents' homeland or another country for an extended period", for the purpose of strengthening cultural identity, family relations, and language skills or for solving conflicts.
Parents sending their children on such trips could face up to four years in prison, according to the text of the proposed plan.
People receiving unemployment state income (Danish: kontanthjælp) will see their income cut as a consequence of moving to one of 16 'hard' underprivileged areas, in another of the proposed measures ostensibly aimed at altering demographics in these areas.
Protestors gathered around Mjølnerparken as the plan was presented in the neighbourhood's community centre on Thursday, expressing their dissatisfaction at the plan, which they accuse of punishing and discriminating against people based on where they live.
A small crowd was flanked by police officers in warm clothes outside the building while the announcement was made to press, according to Politiken's report.
Immigration Minister Inger Støjberg arrives at Mjølnerparken. Photo: Mads Claus Rasmussen/Scanpix Denmark
Organisers had advised authorities of their intentions to demonstrate, the newspaper writes.
Banners and harsh heckling greeted some of the ministers, reports news agency Ritzau.
Immigration minister Inger Støjberg, often an unpopular figure for her hardline stance against immigration, was a particular target of the heckling, according to the news agency, with a small number of protestors shouting "fascist pig" as she passed the barrier sealing off the demonstration.
Other shouts by protestors prior to the arrival of ministers included "equality in front of the law" and "help, not punishment", Ritzau writes.
Around 70 people took part in the protest, including Uffe Elbæk, leader of the environmentalist Alternative party, the agency reports.
Janni Milsted, deputy chairperson with a residents' association in Mjølnerparken, criticised the plan for its potential to punish people based on where they live.
"We think there should be equality before the law, whether you're in Mjølnerparken, where we are now, or on Strandvejen," Milsted told Ritzau.
On Wednesday, the opposition Social Liberal (Radikale Venstre) party questioned whether the proposal included in the plan could achieve the government's stated aim of tackling 'parallel societies'.
"The government has so far garnished its announcement with a lot of symbolic policies," leader Morten Østergaard told Ritzau on Wednesday.
"What would really be a far-reaching, strong move would be to invest in daycare, schools and youth education, so young people can get a good start in life," Østergaard said, adding that he believed "preventative work and early intervention" were the best ways of tackling social problems in underprivileged areas.
- Denmark removes neighbourhoods from 'ghetto' list of deprived areas
- Danish government wants double punishments for crimes in underprivileged areas