The government plans to expand the international terminal at Tokyo's Haneda airport, the nation's busiest, to take advantage of increasing travel in Asia.
The bigger terminal is expected to open in the 2013 fiscal year, the transport ministry said Tuesday.
Airports serving the capital are adding capacity after infrastructure spending by China's government helped Beijing overtake Haneda as Asia's busiest airport.
A ¥100 billion international terminal opened at Haneda last year after adding a fourth runway and expanded capacity at Narita airport, the nation's biggest international hub.
Haneda, which handled 62 million passengers in 2009, forecasts that the new terminal will increase the number of international travelers to about 7 million a year in the first 12 months of operations, from 2.5 million previously.