Tokyo's outspoken and nationalistic governor has said he is quitting after nearly 14 years in office to form a new political party ahead of expected national elections.
Shintaro Ishihara, who recently played a key role in reviving a bitter territorial dispute with China, told a news conference he wants to fix the nation's fiscal and political problems.
He blamed the central government and bureaucrats for obstructing policies he believes would benefit the country.
"We must change the inflexible rule of the central government bureaucrats," he said, comparing their influence to the dictatorial rule of the shogun.
Mr Ishihara, 80, angered China earlier this year when he proposed that Tokyo buy and develop a cluster of uninhabited islands in the East China Sea controlled by Japan but also claimed by China.
The national Japanese government responded by buying some of the islands from their private owner, saying it would not develop them.
"I'm returning to national politics by forming a new party with my colleagues," he said. "What I'm trying to do is everything I've been trying to do for Tokyo."
Mr Ishihara is renowned for his outbursts against China, North Korea, foreigners, immigrants, women and even the French language. He once told reporters he "hated" American icon Mickey Mouse for not having the "unique sensibility that Japan has".
He wrote the 1989 book, The Japan That Can Say No, a best-selling paean to ultra-patriotism. He has also tried his hand at screenwriting, authoring a 2007 film, I Go to Die For You, which glorified kamikaze pilots who flew suicide missions in the closing months of the Second World War.
Mr Ishihara blamed Tokyo's failure to win the right to host the 2016 Olympic Games on behind-the-scenes deals, saying Japanese sports officials must become more adept in dealing with the inner workings of the International Olympic Committee.