The Tokyo Olympics will allow some local fans to attend when the games open in just over a month, officials and the IOC said on Monday.
Organisers set a limit of 50 per cent capacity, or up to a maximum of 10,000 fans, for all Olympic stadiums.
The decision was announced after so-called Five Party talks online with local organisers, the International Olympic Committee, the International Paralympic Committee, the Japanese government and the government of metropolitan Tokyo.
The decision contradicts the country's top medical adviser, Dr Shigeru Omi, who recommended last week that the safest way to hold the Olympics would be without fans.
He had previously called it "abnormal" to hold the Olympics during the COVID-19 pandemic.
The Tokyo Games are set to open on 23 July.
Fans from abroad were banned several months ago.
Officials say local fans will be under strict rules.
They will not be allowed to cheer, must wear masks, and are being told to go straight home afterward.
Organisers say between 3.6-3.7 million tickets are in the hands of Japanese residents.
Tokyo 2020 chief executive Toshiro Muto said delegates and sponsors would be classed as organisers, and therefore not part of the spectator cap.
Asked why organisers had gone against the advice of Dr Omi, organising committee president Seiko Hashimoto said: "There are so many cases, domestically and internationally (of) sports events with spectators.
"By exercising thorough measures and based on the government criteria, we believe we can hold the Games with spectators.
"The entire world is facing the same issues and we have to work together to overcome them."
With PA.
