The cabinet of Prime Minister Shinzo Abe approved a new plan that replaces the 1967 blanket ban, Chief Cabinet Secretary Yoshihide Suga told reporters.
Under the policy, arms sales are banned to conflict-plagued countries or nations that could undermine international peace and security, the sales must contribute to international peace and they must boost Japan's security.
"Under the new principles, we have made the procedure for transfer of defence equipment more transparent. That will contribute to peace and international cooperation from the standpoint of proactive pacifism," Suga said.
"And we will participate in joint development and production of defence equipment," he said.
Japan's post-World War II constitution, imposed by the US-led occupiers, banned the country from waging war.
AFP