The project is expected to be spread over nine years beginning in fiscal 2006, according to news reports.
Japan's share will total $1 billion to $1.2 billion, a Defence Agency spokeswoman said, quoting the agency's administrative deputy director, Takemasa Moriya.
Tokyo and Washington are still negotiating exactly how much each country will cover, the spokeswoman said on condition of anonymity according to agency policy.
It has been widely reported that the total cost of the joint missile defense program is estimated at $3 billion.
US embassy officials could not immediately be reached for comment.
Japan will also be responsible for building nose cones and rocket engines for the programme's missiles, the spokeswoman quoted Moriya as saying.
The system is designed to use defensive missiles to destroy attacking ones before they reach their targets.
Japan's self-defense force is
upgrading its capabilities.
Tokyo and Washington agreed in October on the realignment of US forces in Japan, which included the deployment of a missile defense system.
Since last year, the US navy has been patrolling the Sea of Japan, on the lookout for missiles from North Korea.
The isolated, communist North shocked Tokyo and other nations when it test-fired a missile over northern Japan in 1998.
Analysts say North Korea is developing long-range missiles capable of reaching Alaska, Hawaii or perhaps the US West Coast.
Japan's cabinet is set to hold a meeting on 24 December to hammer out more details of the new missile-interception system, the Yomiuri newspaper reported on Thursday.
Japanese media have reported that the project involves a larger, upgraded version of the Standard Missile-3 interceptor to be deployed on an Aegis warship.
The Defence Agency said earlier this month that the US and Japanese militaries are looking at a site in northeastern Japan to base a radar system for the missile shield.
The two militaries are considering stationing the radar system at a Japanese air force base in Aomori, 580km northeast of Tokyo.
The high-resolution radar is supposed to have a superior ability to discriminate targets from decoys.