A government-appointed panel on Tuesday proposed measures to halt the slide in the country's population from the current 127 million and stabilize it at around 100 million in 50 years' time.
The panel's preliminary report is expected to prompt the government to establish the first numerical target for the country's population, officials said.
Japan's population is projected to fall to about 87 million in 2060 if the nation's birthrate remains low. The country will need to work out new policies to slow the decline in population as it would seriously affect its economic and fiscal situation.
During the panel's meeting on Tuesday, economic and fiscal policy minister Akira Amari said the government plans to reflect the proposals in its guidelines on economic and fiscal policies to be released in June.
The panel, led by Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, was set up under the 11-member Council on Fiscal and Economic Policy headed by Prime Minister Shinzo Abe, and has been discussing Japan's medium- and long-term goals.
"We hope the government will share our sense of crisis," Mimura told reporters after the meeting.
It estimated that if Japan's total fertility rate -- the average number of children born to a woman -- recovers to 2.07 in 2030 from 1.41 in 2012 and stays at that level, the country's population will be 105.45 million in 2060.
In the report, the panel called on the government to double its support for parents rearing children. It also called for efforts to encourage senior citizens to work and widen the country's working age parameters from 15 to 64 at present to 15 to 70.
Noting that the birthrates in Tokyo and surrounding areas are lower than those in other parts of the country, the panel called for promoting migration from the Tokyo metropolitan region to other areas.
It also suggested Japan accept more foreign skilled workers with specific know-how to boost the country's economic growth.