The move follows a protracted effort to stimulate the Japanese economy through monetary policy, which has had limited success.
The fiscal package includes new money for infrastructure projects such as new train lines and funds for local governments to spend.
There will also be some increased benefits paid out to people on low incomes and fresh money to help with the continued recovery from the 2011 earthquake and resulting tsunami.
Abe described the measures as a strong package that is an investment in future of Japan. He said it will stimulate demand and promote sustainable economic growth.
The move follows last week’s announcement that monetary stimulus measures are being kept at current levels for now, with no ‘helicopter money’ being issued at this stage.
Investors have appeared relatively unimpressed by the announcement so far, with Japan’s Nikkei 225 down 1.5% at 16,391.
The Japanese Yen strengthend slightly against the US dollar, rising 0.6% to leave a dollar worth 107.7 Yen.