The 7.2 trillion yen measure offered by Prime Minister Yukio Hatoyama's government is designed to create more jobs, help finance small and midsize firms and boost consumption, Kyodo News reported.
About half of the package in the form of grants will be devoted to public works projects to help regional economies hit by the recession.
These allocations will not entail fiscal spending as they have already been distributed to local governments, officials said. Other measures in the package will include boosting the job market and environment-related programs, the report said.
A supplemental budget for the current financial ending next March will be offered to help finance some of the stimulus measures, said Finance Minister Hirohisa Fujii, who also noted the government debt will exceed tax revenue this year for the first time since 1946.
"Our country's fiscal situation is extremely serious," Fujii was quoted as saying.
The stimulus package comes in the wake of the Bank of Japan's decision earlier this month to pump 10 trillion yen or about $115 billion for making three-month loans to commercial banks at 0.1 percent interest. The decision is meant to fight deflation and control the rising yen by further easing monetary conditions.