At the end of Prime Minister Shinzo Abe's three-day visit, Japan offered the reforming Myanmar increased aid worth $394.8 million and agreed to forgive the nation's $1.74 billion debt.
Japan said the former junta-led country had met the required economic and political reforms, with aid now going towards a Japanese developed industrial zone to be built in the capital of Yangon.
"Since both governments acknowledged the continuation of Myanmar's reform efforts, the government of Japan has decided to clear the said overdue charges," the Japanese Ministry of Foreign Affairs said in a statement.
To qualify for debt forgiveness, Japan required Myanmar, also known as Burma, to reduce media censorship, pass a foreign investment law, and permit freedom for political activists and opposition groups like the National League for Democracy. Last year Japan forgave $3.4 billion of Myanmar debt.
Japan will also offer Myanmar security assistance, which includes defense officials training members of the Myanmar military in Japan.
On Saturday during a business conference, Abe - the first Japanese leader in 36 years to visit Myanmar - said Japan is "ready to provide all the possible assistance," and is "happy to support nation-building for Myanmar and help the nation for further development."
While many nations, including the United States, have supported Myanmar in its reforms, the country and President Thein Sein have received criticism for its treatment of its Muslim community.
During Sein's historic visit to the White House, President Barack Obama said he "shared with President Sein [a] deep concern about communal violence that has been directed at Muslim communities inside Myanmar."
"The displacement of people, the violence directed towards them needs to stop," Obama added.