Japan is to allow a US nuclear-powered aircraft carrier to be stationed in its waters for the first time.
The carrier will replace the aged USS Kitty Hawk
The vessel will replace the USS Kitty Hawk, the US Navy's oldest active ship, when it is decommissioned in 2008.
Although US troops have been based in Japan since the end of World War II, public opinion there has long been wary of a nuclear presence.
The Japanese cities of Hiroshima and Nagasaki were devastated by US atomic bombs at the end of the war.
"The security environment in the Western Pacific region increasingly requires that the US Navy station the most capable ships forward," the US Navy said in a statement.
It said the deployment of the new carrier would "fulfil the US government's commitment to the defence of Japan, and the maintenance of international peace and security in the Far East".
Tokyo has long opposed hosting a nuclear powered warship.
But Japan's Chief Cabinet spokesman, Hiroyuki Hosoda, on Friday echoed the US statement, adding that the carrier's nuclear reactor would be shut down and no repairs carried out while it was anchored in Japan.
The BBC's correspondent in Tokyo, Chris Hogg, says that In one sense this is an unavoidable step. If the US is to maintain its commitment to defend Japan, it needs to replace the ageing carrier that is based in the country.
By 2008, when the new vessel arrives, the US will not have any non-nuclear carriers in service.
But the move has been hotly opposed by Shigefumi Matsuzawa, the governor of Kanagawa prefecture where the ship will be stationed.
"It is very regrettable and we can never understand [the decision]," he said in a statement, adding that he will call on the US and Japanese governments to reconsider the plan.
It is the second military agreement between the two governments announced this week.
On Wednesday, the US said it had agreed to relocate a military base on Okinawa from Futenma to Camp Schwab, near Henoko.
The issue of nuclear deployment will be discussed when Japanese Prime Minister Junichiro Koizumi and US President George Bush meet next month.
The US Navy said that since 1964, nuclear-powered warships have visited Japanese ports more than 1,200 times.