The new imperial era will begin on 1 May, when Crown Prince Naruhito becomes emperor.
According to AFP, the word 'Reiwa' consists of two characters: "Rei", which can have meanings related to "order" but also "auspicious" and "Wa", which usually translated as "peace" or "harmony".
The government is expected to explain the official meaning as well as the English spelling for the name later, AFP reported.
Earlier, Japan's government held top-secret meetings to decide on the name for the coming imperial era.
"A short while ago, the government decided at a cabinet meeting on the new era's name and how to pronounce it," Cabinet Secretary Yoshihide Suga said at a press conference, as cited by AFP.
The era's name, or "gengo," is used widely in Japan — on coins, calendars, newspapers and in official documents, Reuters reported.
"We hope (the era's name) will be widely accepted by the people and deeply rooted as part of their daily lives," Suga said, as cited by AP.
According to Reuters, Naruhito's ascension to the Chrysanthemum Throne will come a day after his father, Emperor Akihito, abdicates on 30 April, ending the Heisei era, which began in 1989. The word "heisei", according to AFP, means "peace prevails everywhere".
Akihito will be the first emperor to abdicate in Japan in over two centuries.