Japan is the last major developed country to address the possession of child porn. Under current law, only production and distribution are banned, a situation that activists say is damaging to children.
The Lower House Judicial Affairs Committee discussed a bill to expand the scope of the legislation on Wednesday and was expected to send it on to the chamber later in the day.
The House of Representatives is expected to swiftly pass the bill and move it to the upper chamber for a vote before the current Diet session ends June 22.
The bill would ban possession of photos and videos depicting real children, but would exclude manga and anime following calls to protect freedom of expression, the Japan Times reported.
Anyone found guilty of possessing the material could face up to a year in prison or a maximum fine of 1 million yen.
To give people a chance to throw away such material, the penalties would be delayed for one year after the revised law takes effect.
Campaigners against child pornography have long urged Japan to outlaw the possession of sexually explicit images of children.
Japan is the only member of the Group of Seven industrialized nations where the possession of child pornography remains legal. Such material is banned and subject to penalties in more 70 countries worldwide.