Junichiro Koizumi said late on Tuesday that the award would be named after Shideyo Noguchi, a Japanese scientist who died from malaria in Ghana in 1928 while researching yellow fever.
"The proposal is for an award of a prize that will be no less major than the Nobel Prize, which will be given by the government of Japan to outstanding medical researchers," Koizumi said at a news conference with John Kufuor, the Ghanaian president, in Accra, the capital of Ghana.
"This Noguchi prize is what we would like to consider as recognition for the contributions that are made by medical researchers and people who give medical care in Africa as a whole," Koizumi said.
The first award ceremony would take place in Tokyo in 2008 at the Tokyo International Conference on Africa's Development (TICAD), a Japanese-hosted forum where Western donors meet to review policies towards Africa.
The occasion would also commemorate the 80th anniversary of Noguchi's death at 51.
Japan funds a modern medical research facility at the University of Ghana in Accra.
Koizumi, in Ghana on his first official visit to Africa, said Japan would develop the criteria and other details of the award, in consultation with Kufuor and Alpha Oumar Konare, the African Union president.
Koizumi's trip to Africa, during which he also visited Ethiopia, comes as Japan seeks closer ties with the world's poorest continent and seeks to boost its global influence.
Tokyo is seeking African support
for a Security Council seat
Tokyo is seeking to woo African support for its attempt to win a permanent seat on the UN Security Council.
"When we look towards Asia, China is already there on the Security Council," Kufuor said. "From Ghana's perspective Japan should be the other big power from Asia. Ghana is supporting Japan to get it."
Japan says it is the fourth leading donor for Africa after France, the US and Germany.