News reports said the Cabinet has already agreed to the new policy.
Yoshihiko Noda said during a debate among party leadership candidates that he understands that most Japanese support a nuclear-free country. He also said he would take into account his ruling party's recommendation last week that Japan's dependency on nuclear energy be phased out by the 2030s.
"There could be different views about how we can achieve that goal, and by factoring those into consideration our party last week proposed we should aim for a nuclear-free society. I must take this seriously," Noda said during the debate.
He said the new policy, expected by end of the week, would be a major shift from Japan's decades-long advocacy of nuclear power.
Japanese media reported Wednesday that Noda and key Cabinet ministers have agreed that the new energy policy will include an abandonment of nuclear power by the 2030s, mainly by retiring aging reactors and not replacing them.
Based on the party proposal, the new policy would include a 40-year cap on reactor lifespans, no construction of new nuclear reactors, and strict safety checks before any reactors are restarted. It also says Japan should make greater use of renewable energy and undertake greater conservation efforts, such as using smart grids.
Japan has been discussing revisions to its energy policy in the wake of last year's disaster at the Fukushima Dai-ichi nuclear power plant set off by a massive earthquake and tsunami. Before the accident, resource-poor Japan relied on nuclear power for one-third of its energy needs and planned to raise that to 50 per cent by 2030.
The crisis fueled doubts about nuclear safety and caused a loss of public trust in the government and nuclear industry.
The growing anti-nuclear sentiment, including regular mass protests, made it difficult for the government and plant operators to restart reactors idled for inspections, and by early May all 50 Japanese reactors had gone offline.
Noda allowed two to restart in July to avoid power shortages during the hot summer months. Noda at that time stressed that the startup was crucial for Japan's economy and energy needs.
Noda's government has faced strong resistance to changes in the nuclear policy from business leaders and utility operators who are concerned about high energy costs. Towns hosting the 50 reactors — usually poor, remote fishing villages hungry for subsidies — also have complained of a loss of income and jobs.
Aomori prefecture in northern Japan, which has served as a nuclear waste processing hub, has threatened to return spent fuel to nuclear plants across the country. Noda said officials are continuing efforts to gain the prefecture's understanding of the need to change the energy policy.