By Agence France-Presse
Thousands of able-bodied employees at 27 ministries and government agencies were wrongly counted as disabled, Tokyo admitted.
"We deeply apologise for something that should not have happened to the government, which has a responsibility to secure and stabilise employment of people with disabilities," government spokesman Yoshihide Suga told a regular news conference.
He announced the creation of a working group headed by the labour ministry to investigate how the disabled employment figures were padded and urged regional authorities to conduct similar probes.
Health Minister Katsunobu Kato said thousands of people were wrongly counted as having disabilities in the government figures. In one example, a person with diabetes was counted towards the quota.
When the figures were revised, the ratio of government employees with disabilities dropped from 2.49 percent to 1.19 percent.
Last fiscal year, Japan set a hiring quota in government ministries of at least 2.3 percent, with a quota of 2.0 percent for the private sector.
"We will make efforts to meet the legal requirement this year. But if that becomes difficult, we will draft a plan to achieve the goal next year, as the law requires us to do," Kato told reporters.
The situation is "highly regrettable," Kato added.
The Japan Council on Disability, which represents people with disabilities, said the scandal had caused an "immeasurable shockwave".
"This implies that deep down the government as a whole is hoping not to hire disabled workers. This is nothing but discrimination against impaired people," the group said in a statement.
Internal affairs minister Seiko Noda, whose son has disabilities, told reporters earlier this month that officials at her ministry had confirmed manipulating data.
"I was extremely shocked to hear that such a thing was happening, even though I don't know the exact number," said Noda.
"Speaking as the mother of a disabled child, not as the internal affairs minister, this is something I cannot allow," she added.
The scandal is an embarrassment for Japan's government two years before the country hosts the Summer Olympics and Paralympics.
The government has sought to improve access for people with disabilities and boost their integration into society ahead of the games.