The current state of emergency is due to expire on August 31, but a continuing surge in coronavirus cases has spurred calls to extend it. Tokyo announced 2,962 new daily cases on Monday, after a record 5,773 on Friday.
The government will expand the state of emergency to the prefectures of Ibaraki, Tochigi, Gunma, Shizuoka, Kyoto, Hyogo and Fukuoka, Economy Minister Yasutoshi Nishimura, who is in charge of Japan's pandemic response, told reporters.
"Many experts expressed an extremely strong sense of crisis about the medical care situation and the status of infections," Nishimura said after getting approval from a panel of public health advisers for the government's plan.
Prime Minister Yoshihide Suga is expected to formally announce the move later on Tuesday and then hold a news conference at 9pm to explain the decision.
The coronavirus curbs include asking restaurants to close early and stop serving alcohol in exchange for a government subsidy.
The expert advisers also approved the government's plan to expand less strict "quasi-emergency" measures to 10 additional prefectures, Nishimura said.
Dai-ichi Life Research Institute estimated in a report the government's extended and expanded state of emergency would lead to a total economic loss of about 1.2 trillion yen ($US10.98 billion) and could slash 66,000 jobs.
That was about 60% higher than an expected economic loss of about 750 billion yen if the emergency remained at its current scope and schedule.
Repeated states of emergency have had limited effect in slowing the spread of the virus in Japan as cooperation is voluntary.
Pandemic fatigue and summer vacations have also been blamed for contributing to the latest Covid-19 surge in a nation where only around 37% of people have been fully vaccinated.
