0202 GMT October 30, 2020
The bill, which also calls for a study on empowering the role of women in the dynasty, was unanimously approved by lawmakers on Friday.
The bill now moves to the more powerful upper house or senate for the final approval which is expected to be next week.
Akihito had expressed his apparent wish to abdicate last summer, due his age and declining health. He has been treated for prostate and heart disease.
The post WWII Imperial House Law set in 1947, when Japan was under occupation, however, had not included any provision for the emperor's abdication.
If Akihito's abdication request is approved by the upper house, he can retire in three years at age 86 after 30 years as the Emperor of Japan.
Akihito was 56 years old when he took the throne in January 1989 after the death of his father, Emperor Hirohito, who died at age 87.
Crown Prince Naruhito, the first in line to succession, is 57 years old.
The male-only succession rule bans Naruhito’s daughter from succeeding to the throne.
Naruhito’s younger brother, Prince Akishino, has two adult daughters and a 10-year-old son.
Lawmakers are now considering the future of the succession by making possible changes in the rules determining the country's 2,000-year-old monarchy.
However, Prime Minister Shinzo Abe and his ultra-conservative Liberal Democratic Party are reluctant to make changes in the traditional rules of the dynasty despite concerns about a shortage of heirs among Japan’s ruling family.