Bank of Tokyo-Mitsubishi said on Friday it would start equipping its automated teller machines (ATMs) with the new system later this year.
The bank said the move was part of its effort to fight ATM fraud as conventional magnetic bank cards would not be sufficiently secure in the future.
The new system has an infra-red sensor which reads, without contact, the pattern of veins in a customer's palm, a bank official said.
It will be the first biometric security system to be used in the nation's banking sector.
"Like finger prints, the vein patterns are different depending on individuals," the Tokyo-Mitsubishi official said. "We have concluded that the sensor is one of the best ways to boost security."
The bank declined to disclose further details of the plan, including the cost of the project or which company had supplied of the system.
Several Japanese electronics and computer companies, including Fujitsu Ltd, have developed security systems based on the reading of vein patterns.