Japanese Prime Minister Junichiro Koizumi told a meeting of leaders from the two-party coalition that the "conditions for sending troops to Iraq have been realised," New Komei party head Takenori Kanzaki said.
The blessing of the junior coalition partner clears the way for Defence Agency chief Shigeru Ishiba to issue a formal order to send a 600-strong force.
New Komei had earlier expressed reservations over the fragile security situation in southern Iraq, where an advance party was sent last week to lay the ground for the full deployment of Japan's humanitarian mission.
Over the next two months, the troops will join an advance party of ground troops that left on January 16 to assess the situation on the ground in the town of Samawa.
The Japanese troops are to engage in non-combat operations, such as providing water and medical supplies, but their rules of engagement allow them to defend themselves if attacked.
The ruling parties' decision came despite protests on Sunday in Tokyo that showed popular opinion is still deeply divided on the issue, with 6,000 people rallying against sending Japanese troops to the region.
The controversy is rooted in Japan's post-war constitution, which bans the use of force in settling international disputes.
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