Leaders put the finishing touches on a deal that will see Japan forgive some $3.7 billion in debt owed by Myanmar's government.
Japanese Prime Minister Yoshihiko Noda says Tokyo has also agreed to offer new loans to the deeply impoverished country, once an international pariah.
Run by the military for five decades, last year Myanmar surprised critics by launching a series of democratic reforms, prompting the West to ease sanctions.
Myanmar President Thein Sein, one of the architects of that transformation, thanked Japan for the gesture.
He said it would help the country continue democratic reforms and launch development projects.
Thein's visit to Tokyo is the first by a Myanmar head of state in almsot three decades.
Andrew Raven, Reuters.
