Suga said Japan would officially inform the IWC of its decision by the end of the year, which will mean the withdrawal comes into effect by June 30.
It means Japan will be able to freely hunt species now protected by the IWC, like minke whales.
The withdrawal from the IWC may be a face-saving step to stop Japan's ambitious Antarctic hunts and scale down the scope of whaling to around the Japanese coasts.
Commercial whaling was banned by the IWC in 1986 after some species were nearly driven to extinction, the BBC reported.
The danger in this move is that Japan will be joined by the countries that have supported its past efforts, thus fracturing the organization that is primarily responsible for the survival of many whale species into the 21st century.
The IWC forced a commercial moratorium in the 1980s due to a dwindling whale population.
Japan also suggested in 2007 that it might withdraw from the IWC in protest at the ban on commercial whaling but it was later persuaded by the United States and other countries to remain in the organisation.
Japan suspended its hunt for one season to re-tool its whaling programme with measures such as cutting the number of whales and species targeted, but resumed hunting in the 2015-2016 season, capping its Antarctic catch with a quota of 333 whales annually. Second, its commercial whaling will be limited to its territorial waters and its exclusive economic zone.More news: Palace produce a 189/1 shock to give title race a boost
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Suga said Japan will notify the IWC of its decision by December 31 and remains committed to worldwide co-operation on proper management of marine living resources even after its IWC withdrawal.
"It's clear that the government is trying to sneak in this announcement at the end of year, away from the spotlight of global media", said Sam Annesley, the Executive Director at Greenpeace Japan.
The IWC's moratorium on commercial whaling was adopted in 1982, and Japan halted commercial whaling in 1988.
Japan has deflected global criticism and staunchly defended commercial whale hunting.
Japan has caught between about 200 and 1,200 whales each year, saying it is investigating stock levels to see whether the whales are endangered or not.
Japan's announcement means that it will be free to restart commercial whaling in July. In recent years, Japan was often accused of using the guise of "scientific research" as an ethical and legal cover for its hunting trips to Antarctica.
The Japanese government had tried to persuade the IWC to allow its commercial whaling, but the global organization rejected the bid in September.
While the Japanese political class has sought the resumption of commercial whaling activities, campaigners say eating whale is becoming "less and less popular".