|The Olympic Rings monument outside the Japan Olympic Committee headquarters in Tokyo. (Photo: Reuters)
The move marked a sharp turnabout from as recently as last week, when some officials were still insisting they could organise the Games safely with some fans.
The global sporting showpiece is due to start on July 23 and run until August 8.
Prime Minister Yoshihide Suga said it was essential to prevent Tokyo, where the highly contagious Delta variant of COVID-19 variant was spreading, from becoming a flashpoint of new infections.
People will also be asked not to gather for events on public roads, such as the triathlon, though officials said some venues outside the greater Tokyo metropolitan area would allow small numbers of spectators.
Much of Japan's population is still not vaccinated against COVID-19, stoking fears that an influx of thousands of athletes and officials will fuel more infections.