Japan's ruling party, the Democratic Party of Japan has agreed to postpone a rise in the tax to 8% until April 2014.
A further increase had also been mooted for October 2015.
The 8% tax level was due to come into force by April 2013. with the government having vowed to double the sales tax from its current 5% to improve the country's finances.
Growing debt levels in the country have given Japan the highest public debt to GDP ratio among the world's developed economies.
Japan has been trying rebuild its infrastructure and economy after costs from the earthquake and tsunami in March came to over $200 billion.