Japan's Cabinet decided Tuesday to effectively lift a four-decade self-imposed ban on weapons shipments that has nominally prohibited Japanese arms makers from joint development and export of military technology.

The move to abandon the Cold War-era restrictions comes as Japan seeks to defer costs for developing and manufacturing advanced technology in areas such as ballistic missile defense and jet fighters. While there have been many exceptions in the past, the decision marks the first major revision since the ban was introduced in 1967 and tightened in 1976.

"Whereas previously exceptions have been granted on a case-by-case basis, we will now institutionalize exceptions in a comprehensive manner," chief government spokesman Osamu Fujimura told reporters, adding that Japan would continue to uphold the principle of not exporting weapons where it might prolong international conflicts or violate embargoes.

The policy shift came during a national security council meeting chaired by Prime Minister Yoshihiko Noda, who has taken a more hawkish stance on defense issues than his two most recent predecessors, who also considered relaxing the ban.

Japanese industrial interests and hawkish members of parliament have long pushed for overturning the ban, but the issue has been sensitive due to Japan's post-World War II commitment to pacifism. The revision was hotly debated last year and widely expected to accompany a new midterm defense plan announced a year ago. But the proposal was shelved after strong opposition from a minority partner in Japan's coalition government, headed by then prime minister Naoto Kan.

The decision Tuesday follows Kan's replacement by Noda in September and Japan's selection last week of Lockheed Martin Corp.'s (LMT) pricey F-35 Lightning Joint Strike Fighter to replace the its Air Self Defense Force's aging fleet of 1960s-era F-4 jets. While Japan says it plans to spend some Y1.6 trillion ($20.8 billion) on the program over the next 20 years, it hopes to offset some of the costs of procuring and partially producing the aircraft domestically by exporting components to other F-35 buyers.

It is still unclear which parts of the advanced stealth fighter will be made in Japan as discussions between Lockheed Martin and the Defense Ministry aren't expected to take place until next year. But government and industry officials in Tokyo have signaled that they expect to win some contracts in a globally scaled program for up to 3,000 F-35 jets.

Mitsubishi Heavy Industries Ltd. (7011.TO), IHI Corp. (7013.TO) and Mitsubishi Electric Corp. (6503.TO) will participate in production of the plane.

Japan's commitment to abstain from arms exports, enshrined in its so-called "three principles," was designed to prevent weapons shipments to communist bloc countries amid the height of the Cold War, along with nations under U.N. arms embargoes and war zones. By showcasing the country's avowedly pacifist orientation, they also eased concerns about remilitarization even as Japan's Self Defense Forces seemed at odds with a constitutional renunciation of the use of force.

A strict interpretation of the ban would prevent the U.S. and other allies from exporting systems that included Japanese-developed components. But over the years, Japanese officials have gradually chipped away at the policy, creating exceptions when the rules seemed to get in the way of key projects, like joint development programs with the U.S.

Most recently, the U.S. Defense Department last year pressured Japan to create an exception to its rules to allow the U.S. to sell to Europe missile interceptors developed with Japan.

Even as Japan has avidly developed and deployed advanced military technology, it faces mounting pressure from the deterioration of its fiscal balance sheet. The country's defense budget--at Y4.6 trillion this year--has declined for nearly a decade amid a debt-to-gross domestic product ratio that has soared to 200%. The rising costs associated with producing military hardware that can technically only be used in Japan has been a major factor prompting the export-ban rethink.

-By Chester Dawson, The Wall Street Journal; +81-3-6269-2837; chester.dawson@wsj.com

-George Nishiyama and Takashi Nakamichi contributed to this article

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