The 79.69 trillion yen fiscal 2006 budget cleared the House of Representatives on Thursday, paving the way for Diet approval by the March 31 fiscal yearend.
A vote on the general-account budget was held by the Lower House Budget Committee in the afternoon and was followed by a vote at the chamber's plenary session.
The budget's passage was secured by the majority seats held by the ruling coalition of the Liberal Democratic Party and New Komeito.
The budget is expected to sail through the House of Councilors, although the Constitution states that a national budget will be enacted automatically within 30 days of its Lower House passage if the Upper House does not pass it and no agreement can be reached between the two chambers or it has not been voted on.
The fiscal 2006 budget is 3 percent smaller than the initial fiscal 2005 budget due to spending cuts in a number of policy areas. The budget also predicts tax revenue to rise in the new year beginning April 1.
If enacted, it would mark the first time in eight years that an initial general-account budget has fallen below 80 trillion yen.
One key feature of the budget is a drop in the issuance of new government bonds below 30 trillion yen for the first time in five years.
With the budget's enactment nearly complete, the Diet is now expected to shift its focus to debating a bill on wide-reaching administrative reforms.
The reform bill includes cuts to civil servants' salaries, a review of the special budgetary accounts and the merging of state financial institutions in a bid to slim down the bureaucracy.