Japanese Foreign Minister Toshimitsu Motegi holds online talks with British International Trade Secretary Liz Truss on September 11, 2020.
Struck in principal, the deal could increase trade by £15.2bn, giving a £1.5bn boost to the economy and increasing United Kingdom workers' wages by £800m.
The UK-Japan comprehensive economic partnership agreement was agreed in principle on a video call between Britain's global trade secretary Liz Truss and Japan's foreign minister Motegi Toshimitsu.
Listing some of the agreements, the Department for International Trade said manufacturers, food and drink producers, and the tech sector would particularly find benefit.
Motegi told reporters following the talks, "The deal will allow for the continuation of advantages that Japan has gained from the Japan-EU free trade deal and will secure continuity for Japanese companies' businesses".
"This is our first major post-Brexit trade deal and it goes far beyond the existing European Union deal by securing new wins for British businesses including in our great manufacturing, food and drink, and tech industries", she added.
Japanese Foreign Minister Toshimitsu Motegi (L) is pictured in Tokyo on September 11, 2020, during his video conference with British International Trade Secretary Liz Truss.
Digital and data provisions in the agreement went "far beyond" those in the EU's trade deal with Japan, helping British financial technology firms operating in the Asian country, it said.
This government has committed to publishing updated figures in due course now that we have a final Agreement with tangible benefits for the UK.
Both sides are seeking to implement a new deal next January.
The deal is also an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
"We urge ministers to redouble their efforts to reach a comprehensive partnership with our largest trading partner at a crucial time in the negotiations".
You can nearly hear the sighs of relief echoing around Westminster and within the business community.
Britain had demanded a low-tariff import quota for some of its agricultural exports, including blue cheese, to Japan, but Tokyo remained reluctant about introducing such a preferential quota for London.
The UK-Japan deal had been widely seen as one the easiest within reach for London, being based largely on the EU-Japan agreement.
Failure to seal a deal could risk a trade loss worth up to €110bn (£102bn, $130.2bn) over the next five years to 2025.
Motegi said the talks had been hard "but we managed to reach an agreement in principle with extraordinary speed, in just three months".
"While maintaining the high levels of access to the British market under the Japan-EU EPA, we improved our access to the British market on train cars and some auto parts".