The announcement comes as Japan struggles with a shortage of soldiers in the face of growing concerns about China and North Korea.
Only buzz cuts were allowed for male recruits, and short hair for females.
But from April, the rules will be relaxed to allow troops to have longer hair.
Under the new rules, male troops will be allowed to have short back and sides with longer hair on top.
Female personnel will be allowed to have longer hair - but cannot fall onto the shoulders when it is tied up while in uniform - and does not interfere with the wearing of a helmet.
According to the Kyodo news agency, news of the relaxed rule was first reported in January during an expert panel meeting tasked with boosting troop numbers for Japan's Self-Defence Forces (JSDF).
Defence minister Minoru Kihara said during that meeting: "As our nation faces a serious workforce shortage, we recognize competition with others, including the private sector, to secure talent has been intensifying."
The role of Japan's military since World War Two has been exclusively defensive in line with the country's pacifist constitution.
The bid to drive up recruitment comes as Japan grapples with China's rapid military build-up and North Korea's expanding missile and nuclear programs.
Last year, Japan announced it would substantially boost its defence spending over the next five years, but the JSDF has been struggling to hit recruitment targets, with officials saying the army is operating at 10% below capacity.
The Japan Times has reported that on top of a declining birth rate and having the world's oldest population, low morale due to poor pay and allegations of sexual harassment has also hindered recruitment.
Last year it was reported that the country's defence ministry was also considering moves to allow people with tattoos to join the JSDF.
Tattoos have long been taboo in Japan, where they are associated with yakuza organised crime gangs.
Officials have acknowledged that many people who have tattoos are not gangsters and the ban was hindering recruitment.
-- Courtesy of BBC News