Japan's defense budget for the next fiscal year is likely to top ¥5 trillion ($40 billion) for the first time, government sources said, as the military prepares for an expanded role under new security legislation.

The budget for the 12 months from April 2016 will include funding for a controversial U.S. military base to replace the U.S. Marine Corps's Futenma air base on the southern island of Okinawa, host to the bulk of U.S. military forces in Japan.

The 2016/17 budget is expected to be finalized by the Cabinet on Dec. 24.