The review will include all 10 venues that Tokyo plans to build for the sporting extravaganza the city won the right to host last September on the strength of its financial clout and pledges to keep most competition sites close together.
"There is no choice but to review the plans within the scope of our commitments to the International Olympic Committee (IOC)," Hakubun Shimomura, education and sports minister, told reporters on Wednesday.
Construction and labour costs have been pushed higher around Japan by the country's expanding economy and rebuilding efforts after the March 11, 2011 earthquake and tsunami, which devastated a wide swathe of the northeastern coastline.
Questions have also been raised about the cost of maintaining the venues after the Olympics and how useful they will be to Tokyo citizens, both points that Tokyo Governor Yoichi Masuzoe raised in proposing the review on Tuesday.
The original Olympics proposal, which budgeted some 153.8 billion yen ($1.5 billion) for venues, did not take into account the impact of the Japanese consumption tax hike that took place in April and did not predict the sharp rise in construction costs, a Tokyo government official said.
"We still don't know what venues will be involved or what the scale of the revisions might be," he added.
"As to whether the venues will be smaller or not, the rising costs are a worry, so the review will have to be centred on keeping the budget in check."
Following the review, a revised plan will be submitted to the IOC in February 2015.
Tokyo won a decisive victory over rivals Istanbul and Madrid to become the first Asian city to host the Summer Games for the second time with its slick presentation and $4 billion war chest.
The official said it was far too early to say whether the original budget would be sufficient but that final calculations for a number of expenses, including tests on the reclaimed land being used for several venues, still needed to be made.
The review will not include the new main stadium, which has been slammed for being too large for its site and too expensive to maintain after the Games, since it is being paid for by the national government and not Tokyo.
Plans for the stadium, which was designed by London-based architect Zaha Hadid, who designed the aquatics centre for the 2012 London Olympics, have already been scaled back due to rising costs.
Bids for work to demolish the current National Stadium, built for the 1964 Olympics, had fallen through and may lead to a slight delay in construction, said an official at the Japan Sport Council, which is in charge of the arena.
"But delays will be quite minimal, not even a month or two," she added.
- Politics & Government