"Remdesivir was approved under exceptional measures," a health, labour and welfare ministry official said.
"It was our country's first such approval for the treatment of coronavirus patients," the official told AFP.
Prime Minister Shinzo Abe said last week the government was getting ready to give a speedy green light to the experimental drug developed by US firm Gilead Sciences.
The US go-ahead came after a major clinical trial showed remdesivir - originally developed to treat Ebola - shortened the time to recovery in some patients by a third.
The difference in mortality rate was not statistically significant.
Remdesivir, which is administered by injection, was already available to some patients who enrolled in clinical trials around the world.
"The Japanese approval of remdesivir is in recognition of the urgent need to treat critically ill patients in Japan. It is a reflection of the exceptional circumstances of this pandemic," said Merdad Parsey, chief medical officer at Gilead Sciences.
Remdesivir incorporates itself into the virus's genome, short-circuiting its replication process.
The Gilead statement noted that clinical trials are ongoing to evaluate the safety and efficacy of remdesivir for the treatment of COVID-19.
As for Avigan, developed by Japanese firm Fujifilm Toyama Chemical, top government spokesman Yoshihide Suga said the government "aims to approve it this month" if a clinical trial involving 100 patients proves effective.
The drug, whose generic name is favipiravir, was approved for use in Japan in 2014 but only in flu outbreaks that are not being effectively addressed by existing medications.