Australia has hailed the unleashing of Japan's military might to potentially go into battle in defence of allies.
Prime Minister Shinzo Abe announced the loosening of restrictions this week in what is a controversial shift from Japan's pacifist stance.
Under the changes, Japanese troops would be able to go to the aid of ally countries if they came under armed attack from a common enemy.
It would only occur if there was a clear danger to Japan's survival and to the Japanese people, and the use of force would be limited to a minimum.
Australia's Department of Foreign Affairs and Trade (DFAT) said in a statement the move would allow Japan to make a greater contribution to international peace and stability.
It would also enhance its commitment to peacekeeping operations, humanitarian and disaster relief.
Australia had worked well with Japan in difficult security environments overseas and the policy shift would deepen defence cooperation, DFAT said.
Japan's decision to expand the scope for military action could inflame tensions with China and South Korea, experts believe.
Mr Abe will visit Australia next week.
His trip, from July 7 to 10, will be the first bilateral visit to Australia by a Japanese leader for 12 years.
Mr Abe will have the rare privilege of addressing a joint sitting of parliament in Canberra on July 8.
The Senate will already be sitting but House of Representatives members will be brought back especially for the speech.
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