Spectators from overseas will not be able to attend this year's Olympics.
Organizers made the major concession to allow the event to take place.
The games are due to commence in July after being rescheduled last year.
Overseas spectators will be barred from attending the summer Olympics in Japan, the organizing committee confirmed on Saturday, according to multiple reports.
The Tokyo event, which is due to commence in July, was originally scheduled for 2020 but postponed due to the COVID-19 outbreak.
Concerns over safety measures have been raised over the past months, given that the pandemic is not yet over.
Some Japanese outlets had anticipated the decision to ban international fans - made by the International Olympic Committee, the International Paralympic Committee and the national and local governments in Japan - for some time.
Refunds will be offered to those who have already bought tickets. Tokyo Organising Committee CEO, Toshiro Muto, confirmed that around 600,000 Olympic tickets and around 30,000 Paralympic tickets will need to be compensated, Sky News reported.
Usually, about 10 to 20% of Olympic tickets are sold to international spectators, according to The New York Times.
The economic burden of lost ticket sales may weigh heavily on Japan. The country is officially spending $15.4bn to host and organise the games but several government audits have suggested the true cost may be twice that much, according to Al Jazeera.
As part of Japan's efforts to inhibit the spread of new, more infectious variants of COVID-19, Japan has also banned all inbound flights to the country from abroad since late December, The New York Times report said. Those protocols, however, have been eased for Olympic athletes and some of their entourages.
It was reported in January that about 80% of people in Japan thought the Tokyo Olympics should be cancelled or delayed. They cited surging COVID-19 cases across the country. The most recent data shows there are 452,702 cases in the country.
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