Tokyo's outspoken and nationalistic governor has said he will resign to form a new political party ahead of expected national elections.
Shintaro Ishihara, who has spent nearly 14 years in office, told a packed news conference on Thursday that he wanted to fix the nation's fiscal and political problems.
Ishihara recently played a key role in reviving a bitter dispute with China over islands in the East China Sea.
He blamed the central government and bureaucrats for obstructing policies he believes would benefit the country.
"We must change the inflexible rule of the central government bureaucrats," he said, comparing their influence to the dictatorial rule of the shogun.
Ishihara, 80, angered China earlier this year when he proposed that Tokyo buy and develop a cluster of uninhabited islands controlled by Japan but also claimed by China. The islands are called Senkaku in Japan and Diaoyu in China.
The national government responded by buying some of the islands from their private owner, saying it would not develop them.
"I'm returning to national politics by forming a new party with my colleagues," he said. "What I'm trying to do is everything I've been trying to for Tokyo."
Ishihara is renowned for his outbursts against China, North Korea, foreigners, immigrants, women and even the French language.
He once told reporters he "hates" the American icon Mickey Mouse for not having the "unique sensibility that Japan has".
Ishihara wrote the 1989 book The Japan that Can Say No, a best-selling paean to ultra-patriotism. He also has tried his hand at screenwriting, authoring the 2007 film I Go to Die for You, which glorified so-called "kamikaze" pilots who flew suicide missions in the ending months of World War II.
Ishihara blamed Tokyo's failure to win the right to host the 2016 Olympic Games on behind-the-scenes deals, saying Japanese sports officials must become more adept in dealing with the inner workings of the International Olympic Committee.
The governor has been credited with pushing through reforms such as restricting diesel emissions for better air quality and cutting government spending.