Osaka Mayor Hirofumi Yoshimura says the city will terminate its 60-year sister relationship with San Francisco, a day after the US city formally accepted a statue symbolising the "comfort women" victims of the Japanese military's wartime sexual slavery.
Prime Minister Shinzo Abe's government had urged San Francisco mayor Edwin Lee not to accept the donation of the statue from a local private group in September.
The US city's council passed the motion last week, a move Abe described as "extremely regrettable".
Yoshimura said in a statement, "My understanding is that sister-city ties are based on a strong relationship of trust."
But San Francisco's move made the relationship "vanish", the mayor said.
Since the first of its kind was put up in front of the Japanese embassy in Seoul in 2011, similar statues have been erected in Australia, Germany and US states including Virginia, California and New Jersey.
Up to 200,000 women and girls were forced into sexual slavery by the Imperial Japanese Army before and during WWII, historians say.
Many of the women - known as "comfort women" - were from South Korea, which was under Japanese colonial rule from 1910 and 1945.