The Japanese government agreed with the landowners to pay USD 26 million for the purchase of three islands known as Senkaku in Japan and Diaoyu in China, Kyodo News reported citing government officials.
The agency said that the government has struck a deal with the Kurihara family to purchase part of the group of islands at the centre of territorial dispute with China.
Kyodo said that the islands have been administered by Japan for many years and claimed by China.
Deputy Chief Cabinet Secretary Hiroyuki Nagahama secretly met with the family on Monday and reached the agreement, Kyodo said touching of immediate furore in Beijing.
The Senkakus have been administrated by Japan since 1895. But the uninhibited islands have been claimed by China and Taiwan, which know them as Diaoyu and Tiaoyutai, respectively, since the 1970s after studies indicated there may be potentially lucrative gas reserves around them.
The disputed group is made up of five major islands of which Taisho Island is already owned by the central government. The government proposes to take over three of them -- Uotsuri, Kitakojima and Minamikojima, which it has leased from the family for many years.
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Reacting to the reports, China vowed to take "necessary measures" to defend its territory.
"The Chinese government is monitoring developments closely and will take necessary measures to defend its national territorial sovereignty," a foreign ministry spokesman Hong Lei was quoted as saying by Xinhua.