In a notable shift, Japan also said it will no longer conduct controversial hunts in the Antarctic Ocean - where its fleet of whaling ships have killed 333 whales in each of the past two years, under the justification of performing whale research. "The government of Japan must urgently act to conserve marine ecosystems, rather than resume commercial whaling", Sam Annesley, executive director at Greenpeace Japan, said in a statement.
The pay off for Japan is that it says it is free to restart commercial whaling in its own territorial seas and economic zones, while calling off the annual "scientific whaling" in the Antarctic Ocean and Southern Hemisphere.
Japan said it will continue to attend meetings of the IWC to help "rectify the dysfunction" of the organization led by the United States.
But Japan, Iceland and Norway have continued to hunt whales.
Japan has claimed stocks have recovered enough to resume commercial hunting. In total, nearly 2,000 whales have been killed in the Antarctic since 2009 under a special permit granted by the IWC for research purposes.
"Japan argues that it has a long tradition of whaling, even though Japanese today eat very little whale meat", NPR's Anthony Kuhn reports from Tokyo.
Masayuki Komatsu, who served as the chief negotiator for Japan's Fisheries Agency from 1991 to 2005 called the decision to withdraw a "misjudgment", and said it would do nothing to stem the steady decline of Japan's whaling industry over the past decade and a half.
Yoshie Nakatani, an official at the foreign ministry's fisheries division, said Japan would still attend IWC meetings. "What's most important is to have a diverse and stable food supply", he said.
Under its research program, it has been killing 850 Antarctic minke a year, 220 common minke, 100 sei whales, 50 Bryde's whales, 50 fin whales and 10 sperm whales, calculating that to be between 0.01 and 0.88 percent of total stocks of each species. This seems like a win for whales, at least in the Antarctic, but similar numbers of whales have been hunted and killed around Japan and in the northwest Pacific Ocean under the same special permit since 2009.
In 2014, the International Court of Justice ruled that Japan should halt its Antarctic whaling.
Whale meat has always been a staple in Japan's culinary culture, dating back to the Jomon Period from 10,000 to 200 B.C. At its peak in 1962, more than 230,000 tons of whale meat was consumed each year, the Japan Times reported.
However, some Japanese consider whaling a traditional industry and whale meat a culinary delicacy.
Nonetheless, Japanese lawmakers want to promote whales not only as a source of protein but as part of Japan's cultural tradition.
Kazutaka Sangen, mayor of Taiji, a central Japanese town known for dolphin hunts, welcomed the decision and vowed to stick with scientific way of stock management so that Japan's position on whaling can gain understanding from the worldwide community.
Former Defence Minister Itsunori Onodera, who now serves as adviser to the ruling Liberal Democratic Party's fisheries committee, said he supported a decision to withdraw from the IWC, in an interview with Japan's NHK television.