Defense Agency chief Fukushiro Nukaga said Wednesday his agency will disband the Defense Facilities Administration Agency, the entity at the center of a bid-rigging scandal involving, in part, the installation of air-conditioning systems.

"The entity has caused the scandal of this magnitude and it has become clear that the bid-rigging was arranged systematically," Nukaga said on a TV program.

"I'd like to decide on the dissolution of the entity, a step the Japanese people want us to take," he said.