Aso made the announcement after a meeting with Myanmar President Thein Sein in Naypyitaw, Kyodo News Service reported. He said the write down will erase 500 billion yen ($5.73 billion) with the new loan coming to 10 percent of that sum.
"Japan wants to maintain sound relations with Myanmar even if there was a change of its government," Aso said at a news conference after the 80-minute meeting. "Myanmar has been heavily in debt and unable to attract investment. Japan will remove those obstacles and support the country."
The trip to Myanmar was Aso's first since becoming foreign minister last week, Asia News said.
The military regime that ruled Myanmar for two decades, changing its name from Burma and building a new capital city, began liberalization in 2011. Japan was Myanmar's largest creditor and Aso said the old debt was discouraging new investment in the country.
"Myanmar has been unable to make new investments because it is bound to the old debts. The debt waiver is meant to remove this obstacle to Myanmar's economic growth," Aso said.