Shinzo Abe says council members selected April 30, 2019 for the historic occasion. It will be Japan's first abdication in 2 centuries. The following day will be Crown Prince Naruhito's accession.
Abe said, "We'll do our utmost so the process of the Emperor's abdication and the Crown Prince's accession can be carried out smoothly and the Japanese people can offer their blessings."
The Cabinet is expected to officially approve the dates on December 8th.
Abe's chief cabinet secretary says council members decided against choosing the end of 2018 as they wanted the Emperor to mark the 30th anniversary of his enthronement.
They also ruled out early April, saying people across Japan will be busy with the new fiscal and academic year.
April 30th was also selected partly because the day before is a national holiday commemorating the reign of the Emperor's father.
Last year in a rare address, the Emperor said he was concerned his advanced age could make it difficult to carry out his duties. He is 83 years old. When he steps down, it will mark the end of the current "Heisei" era under Japan's traditional calendar.
Emperor's desire to abdicate
Emperor Akihito has been carrying out his official duties as the symbol of the State for decades.
He succeeded his father at age 55, becoming the first Emperor to take the throne as the 'symbol of the State' under Japan's post-war Constitution.
He said at the time, "I hope to seek a new style for the Imperial family befitting a modern age."
Since then, the Emperor has attended significantly more public engagements than his father.
He is said to believe that doing so is a key function of his position, one that comes in addition to performing 'acts in matters of state' as stipulated by the Constitution.
Some of those public appearances included visits to disaster-hit areas.
The Imperial couple consoled people after the 1995 earthquake that devastated the Kobe region. They visited Japan's northeast in 2011 following the massive earthquake and tsunami.
Every year, they visit homes for people with disabilities and senior citizens.
The Imperial couple has also been to World War 2 battlefields across the world to pay tribute to victims on all sides.
Each year, they attend the Japanese government-sponsored memorial ceremony in Tokyo. At a ceremony, Emperor Akihito said, "Together with all of our people, I now pay my heartfelt tribute to all those who lost their lives in the war, both on the battlefields and elsewhere, and pray for world peace and for the continuing development of our country."
The Emperor's busy schedule has at times been overshadowed by health problems. In 2003, he underwent surgery for prostate cancer. He also had a heart bypass in 2012.
In August last year, the Emperor addressed the public in a rare video message. It was then that he hinted he wanted to abdicate, a move unprecedented in modern Japan.
"I am already 80 years old, and fortunately I am now in good health. However, when I consider that my fitness level is gradually declining, I am worried that it may become difficult for me to carry out my duties as the symbol of the State with my whole being as I have done until now," he said.
Earlier this year, the Emperor cancelled some of his activities due to his physical condition. Crown Prince Naruhito and Empress Michiko temporarily took over.
Emperor Akihito has consistently said his title should be held by someone who can fulfill the role's duties.
What is the end of Heisei era for Japan?
When Emperor Akihito abdicates the throne, it will mark the end of an era for Japan. Here is how an Emperor's reign is used to track time.
28 years ago, it was announced that the period of the new Emperor was to be called "Heisei", meaning "achieving peace."
Such era names are known as "gengo" in Japanese. The custom originated in China, with each name consisting of Chinese characters. The first such era in Japan began in the year 645, and there have since been more than 200 such names.
Over the centuries, era names changed when a new Emperor took the throne or after major disasters. In 1868, at the start of the Meiji Era, a new system was introduced in which each Emperor has just one era name.
After World War Two, laws related to era names were abolished.
But in 1979, a new law took effect, creating a new legal basis for using era names. It stipulates that the government shall name a new era only when there is a succession to the Emperor's throne.
Era names are widely used in Japan even today, on items such as coins, driver's licenses and official documents. The era name is often used more frequently than western calendar dates.
The names act as shorthand for the events of a given reign. The images associated with a particular era blend with one's personal recollections of the time to create a special frame of reference.
How do people born in two different eras, Showa and Heisei, think about the reigns in which they lived?
One man we asked who was born in Showa 4 (1929) said, "The Showa Era was a stormy period. My whole hometown burned down in the US air raid. I had to start from zero, and rise from nothing. So I think peace is great. "
Another man, born in Showa 26 (1951), said, "In Showa times, people lived alongside each other in harmonious communities. But now it's different. The individual seems to be more important."
A woman born in Heisei 12 (2000) noted that "For people born in the Heisei Era, everything was already built, so we might lack the motivation to create something out of nothing. We may be a bit spoiled."
Another woman born in Heisei 11 (1999) says, "Email, the internet and social networking services all came about in the Heisei Era. Those things have enabled us to access as much information as we want about people far away, and places that we've never been to."
Over the past 150 years, eras have begun with the accession of an emperor and ended upon his death.
But this time is different, with the emperor retiring. Some say that could affect the sentimental resonance of reign names.
Regardless of how people feel about the change, many in Japan are eager to see what the new era will be named, and what changes and events it will come to be remembered for.