The 83-year-old said last year that his age and health were making it hard for him to fulfil his official duties.
But there was no provision under existing law for him to stand down.
The government will now begin the process of arranging his abdication, expected to happen in late 2018, and the handover to Crown Prince Naruhito.
Akihito, who has had heart surgery and was treated for prostate cancer, has been on the throne in Japan since the death of his father, Hirohito, in 1989.
