The water will be treated and diluted so radiation levels are below those set for drinking water.
But the local fishing industry has strongly opposed the move, as have China and South Korea.
Tokyo says work to release water used to cool nuclear fuel will begin in about two years.
The final approval comes after years of debate and is expected to take decades to complete.
Reactor buildings at the Fukushima power plant were damaged by hydrogen explosions caused by an earthquake and tsunami in 2011. The tsunami knocked out cooling systems to the reactors, three of which melted down.
More than a million tonnes of water have been used to cool the melted reactors.
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Currently, the radioactive water is treated in a complex filtration process that removes most of the radioactive elements, but some remain, including tritium – deemed harmful to humans only in very large doses.
It is then kept in huge tanks, but the plant’s operator Tokyo Electric Power Co (TepCo) is running out of space, with these tanks expected to fill up by 2022.
Read more: BBC
