The new programme will allow foreign employees to transfer workplaces if they have worked in one place for over a year, and if their Japanese language and professional abilities meet certain requirements, Kyodo News reported.
The amended law also prohibits private employers from facilitating transfer to prevent malicious brokers from taking advantage of workers, according to the report.
Supervising organisations will need appoint external auditors if they want to hire foreign candidates to improve accountability.
According to the Japanese government, the new scheme is designed to foster and secure foreign talent as the country faces a shrinking workforce amid demographic challenges.
It also aims to help inexperienced employees obtain more skills to transition skilled worker scheme over three years.
The scheme, which will take effect within three years, replaces the decades-old Technical Intern Training Programme, which had been criticised as a scheme for employers to get cheap labour.
A panel proposed early last year the abolishment of the training programme and consider the creation of a new system to "secure and nurture human resources."
Revoking visa status
Meanwhile, the new amendments passed by Parliament also gives the government authority to revoke the status of some foreigners for select offences.
According to the Kyodo report, which cited the law, the government will have the power to withdraw or change the status of foreigners who intentionally fail to pay taxes and social security contributions.
Justice Minister Ryuji Koizumi said the government will only use it for "malicious cases" after concerns were raised about potential misuse of the authority.
Japan's new reforms come as its foreign population reached a new high of over 3.4 million in 2023, as the local Japanese population went down to 124 million. Various efforts have been made to improve Japan's demographic challenges, including expanding childcare benefits, among others.
