Japan has agreed to slash the costs for a new national stadium by 42 percent with construction for the centerpiece of the 2020 Olympics aimed to be completed by an International Olympic Committee (IOC) deadline of January 2020.
The budget for the arena was set at 155 billion yen ($1.28 billion) on Friday, well down from the 265.1 billion yen price tag for the Tokyo venue that was scrapped in July amid public anger over ballooning costs.
"We have in principle limited the functions of the facility to those necessary for competition under the concept of athlete-first, while keeping the level of the facility suitable as a main stadium for Olympic and Paralympic Games," Prime Minister Shinzo Abe told a meeting of ministers.
"As a result, we have managed to achieve a major cost reduction of more than 100 billion yen."
Under the revised plan, the stadium will still have covered spectator seats but no roof and the capacity reduced by 4,000 to 68,000 with an option to increase that by a further 12,000 seats should Japan wish to host a soccer World Cup in the future.
Air-conditioners will not be installed to cool spectators in an additional cost-cutting measure.
The selection process for the new stadium design and its builders will start next month, with the winning bidders set to be announced by the end of the year.
Construction was set for completion by April 2020, less than three months ahead of the Games, but bidders would be asked to come up with ideas to meet the proposed deadline of January that year, a government official said.
Preparations for Tokyo's second hosting of the sporting extravaganza, 1964 being the first, have run into hurdles on a number of fronts.
Organizers have rolled back on promises to have most venues located within eight km of the Olympic Village while the Games logo has become the focus of plagiarism accusations which Japan and its designer both deny.