The Japanese foreign ministry said in a statement: "To make the East China Sea a sea of peace and co-operation and friendship, Japan and China have agreed to co-operate.
 
"Both the Japanese and Chinese governments have confirmed this and will exchange official documents of agreement."
 
Hostile response
 
The agreement will establish the beginning of joint exploration and development of energy, but has not addressed three other disputed gas fields in the region.
 
The Japanese statement said: "We have taken a first step forward and will continue negotiations."
 
However, Beijing - potentially facing a hostile response from nationalist sections in China - said that the deal did not "harm the respective legal stances of both sides".
 
Jiang said the agreement would "benefit peace and stability in the East China Sea, and benefit China and Japan strengthening mutually beneficial co-operation in the energy sphere."
 
Deal denounced
 
About 20 Chinese protesters denounced the deal outside the Japanese embassy in Beijing.
 
Japan and China are Asia's two largest economies and are both large energy importers.
 
The estimated reserves in the disputed fields is 92 million barrels of oil – representing about three weeks of energy demand in Japan.
 
Despite the small offering, both countries have pursued the fields due to the belief that more reserves will be found.
 
China and Japan's antagonism towards one another has been apparent since the latter's 1931-45 invasion and occupation of parts of China.