Kan told reporters in Tokyo no new federal debt in the form of bonds would be issued and there would likely be supplemental revisions to the budget, the BBC reported.
On March 11, a magnitude-9 earthquake struck northern Japan, triggered a tsunami that washed away entire coastal towns and created a nuclear power plant disaster in Fukushima. At least 27,000 people were killed or are missing, emergency officials say.
Kan said money for relief efforts would come from pension funds and emergency reserves.
The budget has to be approved by Parliament but the BBC said little opposition was expected.
As for the radiation leakage at the nuclear power plant, U.S. nuclear engineer Jack DeVine told CNN it could take decades to completely shut down.
DeVine worked on the Three Mile Island nuclear accident in Pennsylvania in 1979 and said it took three years for engineers to safely access the damaged nuclear core.