Tourists will be able to visit the country without a visa, and will no longer need to go through a travel agency, from 11 October.
A cap on daily arrivals will also be lifted.
Visitors will still need to prove their triple vaccination status and submit a negative Covid-19 test result to enter.
The anticipated influx of travellers will be a welcome boost to government and local businesses, and comes as the Japanese yen has slid to its slowest point against the US dollar in six months.
“Japan will relax border control measures to be on par with the US,” Prime Minister Fumio Kishida said.
The country has allowed visitors since June, but they had to be part of tours.
Kishida also announced a domestic travel incentive scheme that will give discounts on travel, theme park prices, sporting events and concerts. Japanese residents and citizens will be eligible for a 11,000 yen subsidy.
Similar programmes have been introduced in other countries’ re-openings to encourage locals to spend and stimulate the economy. However, like elsewhere, the rise in cost of living has been a dominant concern for locals.
The world’s third-largest economy was one of the last Asian powerhouses to keep its borders closed due to Covid-19 health concerns.
Its death rate is the lowest among the world’s wealthiest nations, while the country’s vaccination rate is among the highest.
Japan also never mandated lockdowns or mask wearing, but many locals readily adopted protections.
Japan saw nearly 32 million foreigners visit in 2019, the last year prior to the pandemic. The restrictions on travellers in recent months had precluded many foreigners from visiting, reports showed.