The remarks by Chief Cabinet Secretary Hiroyuki Hosoda represent the first time a Japanese official has confirmed North Korea's claim to have manufactured nuclear weapons, the Sankei Shimbun said.
"North Korea is near finalising development of nuclear weapons," Hosoda told a ruling party meeting in the western town of Shimane on Saturday, the Sankei said.
Pyongyang has not finished developing uranium-based nuclear weapons, but has completed the development of a plutonium bomb similar to the one dropped by the United States on Nagasaki at the end of World War II, Hosoda said.
"It is urgent to make (North Korea) abandon them," Hosoda said, without giving any evidence to back up his claims.
Hosoda said North Korea and Pakistan had cooperated in the manufacture of nuclear weapons. "It is disgraceful," he said.
Pakistani nuclear scientist Abdul Qadeer Khan publicly confessed in February to leaking nuclear secrets to Iran, Libya and North Korea.
Pakistan has refused to allow he International Atomic Energy Agency (IAEA), the UN's atomic watchdog, to interview Khan to discuss the international nuclear black market he used to run.
A North Korean foreign ministry spokemsan said last month the Stalinist state would never dismantle its nuclear weapons unless the United States drops its "hostile policy" towards the country.
Six-nation talks aimed at convincing North Korea to give up its nuclear weapons programs have failed to make concrete progress so far.