It is the first time the country’s head of the state has abdicated in 200 years, opening the way for his son to take on the role.
The man who had been the symbolic leader of his country since 1989 said he was standing down in a ceremony at the Imperial Palace’s Matsu no ma, or Hall of Pine, in Tokyo.
He had initially signalled his intention to step aside in 2016, leaving the government with little choice but to organise plans for succession.
The ceremony on Tuesday was arranged to mark the official end of the 85-year-old’s 30-year reign.
In his last speech in his role and referring to the next Japanese era of Reiwa, under his son’s rule, he said: “Today, I am finishing my duty as emperor.
“Let me express my deep appreciation for the remarks Prime Minister Abe has just given as the representative of the Japanese people.
“Since ascending the throne 30 years ago, I have performed my duties as the emperor with a deep sense of trust in and respect for the people, and I consider myself most fortunate to have been able to do so.
“To the people who accepted and supported me as a symbol, I express my heartfelt thanks
“Together with the empress, I hope from my heart that the new Reiwa (imperial) era that begins tomorrow will be peaceful and fruitful, and pray for the peace and happiness of our country and the people of the world.”
His reign will end at midnight, after which his son, Crown Prince Naruhito, will ascend the Chrysanthemum Throne, as Japan’s monarchy is known.
Naruhito’s investiture takes place on Wednesday, with an elaborate ceremony, also at the Imperial Palace.
His wife, Crown Princess Masako will become Empress.
Hundreds of people gathered outside the palace compound hours before the ceremony began, eager to witness an event that has not happened since 1817.
One of those watching, Akemi Yamauchi, 55, said: “We came because today is the last day of (the emperor’s era of) Heisei, and we feel nostalgic.”
Her husband, Kaname, added: “We like the current emperor. He has worked hard for the people, he is very thoughtful, and kind to everyone.”
Security was extremely tight around the palace and across downtown Tokyo after police arrested a man on Monday night on suspicion of placing a pair of kitchen knives last week on the school desk used by Akihito’s grandson.