The plan will see more than a million tons of treated radioactive water released
and take decades to complete.
It has now won approval from the U.N.'s nuclear watchdog, despite fierce resistance from some neighboring countries and local residents.
So how will it work?
After Fukushima was hit by a powerful earthquake and tsunami 2011,
water was used to cool the destroyed reactor's fuel rods at the Daiichi nuclear power plant.
This contaminated radioactive water has been stored in huge tanks
enough to fill 500 Olympic-sized swimming pools.
Officials say the tanks are near capacity and have to be removed for reconstruction.
Tokyo Electric Power Company - or Tepco - has been distilling the water to remove isotopes
leaving only tritium, a radioactive isotope of hydrogen that is hard to separate from water.
Tepco will dilute the water until tritium levels fall below regulatory limits
before pumping it into the ocean from the coastal site.
Water containing tritium is routinely released from nuclear plants around the world, and regulatory authorities support Tepco's plan.
International Atomic Energy Agency's chief Rafael Grossi:
"The plan as it has been proposed and revised is in conformity with the agreed international standards. And its application, if the government decides to proceed with it, would have negligible impact on the environment, meaning the water, fish, and sediment."
Tritium is considered to be relatively harmless because it does not emit enough energy to penetrate human skin.
But when ingested it can raise cancer risks, a Scientific American article said in 2014.
The water disposal will take decades to complete, with a rolling filtering and dilution process, alongside the planned decommissioning of the plant.
"And the water dispersion is one that is currently in use in many countries including China, in Korea, in the United States, in France, in many countries that have releases of water that contains certain radionuclides."
Fishing unions in Fukushima however have urged the government not to release the water,
arguing it would undo work to restore the damaged reputation of their fisheries.
Protestors marched in Tokyo in May
with banners reading 'Don't release contaminated water into the ocean!'
(61-year-old doctor from Iwaki, Fukushima)
"The discharge of radioactive contaminated water is not just a problem for Japan, and of course not just for Fukushima, it's a global problem, so I think it's necessary for everyone to think about it."
Neighboring countries have also expressed concern.
China has been the most vocal, calling Japan's plan irresponsible, unpopular and unilateral.
In neighboring South Korea, shoppers have been bulk buying sea salt due to fears of contamination.
Japan has given repeated assurances that the water is safe.
