Friday's approval comes as concerns mount that Pyongyang is now poised to test-fire another missile, believed to be capable of reaching parts of the United States.
Tokyo and Washington are expected to exchange notes and a memorandum of understanding as soon as Monday, enabling research on the system to go ahead, a Foreign Ministry official said.
Japan has allocated 960 million yen ($8.35 million) for its part of the joint research in its budget for the fiscal year to next March 31. The Defence Agency has estimated that the research project will cost Japan around 20 billion to 30 billion yen over a five- to six-year period.
The system is intended to provide protection within a 3,000-km (1,900-mile) radius by detecting incoming ballistic missiles with satellites and destroying them with intercept missiles or by other means.
Japanese officials have said Japan will concentrate its research on four areas: infra-red seekers, kinetic warheads, second-stage rocket motors and nose cones.
In addition to the ballistic missile defence system, Japan decided last year to launch four spy satellites over the next several years to help it detect missile launches.
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