Ministers from the Group of Seven advanced economies agreed on Friday to take concrete measures to end international financing of coal-fired power plants by the end of the year.
Climate and environment ministers from the G7 issued a joint statement following a two-day online meeting.
The statement says the G7 recognizes coal power generation to be the single biggest cause of global temperature increases.
It pledges the G7 will take concrete steps to end government support, including Official Development Assistance and export finance, in what it calls "unabated international thermal coal power generation." The term unabated refers to the burning of coal without emissions controls.
The statement says the G7 commits to "overwhelmingly" decarbonizing the power system in the 2030s, and aims to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial levels.
Alok Sharma, the head of the COP26 UN conference on climate change, tweeted the G7 has taken a major step towards creating a net-zero emissions economy.
The BBC has reported Japan's opposition to restrictions on fossil fuel power. It said the British government expects Tokyo to change its stance by the time of the COP26 meeting to be held in the UK in November.