The ceremony will end with Akihito delivering his final address as emperor, though he will technically remain emperor until midnight.
Tuesday's events will be the first time anyone alive will get to watch a Japanese abdication ceremony.
On Wednesday morning, Crown Prince Naruhito will inherit the Imperial Treasures in his first ritual as emperor.
Why did the emperor decide to abdicate?
Akihito will be the first Japanese monarch to voluntarily relinquish the throne since 1817.
The 85-year-old said in a rare address in 2016 that he feared his age would make it hard for him to carry out his duties and strongly hinted that he wanted to stand down.
"When I consider that my fitness level is gradually declining, I am worried that it may become difficult for me to carry out my duties as the symbol of the State," he had said then.
Opinion polls showed that the vast majority of Japan sympathised with the emperor's desire to retire and a year later parliament enacted a law that made his abdication possible.
Who is the crown prince?
Prince Naruhito is set to become Japan's 126th emperor - and will officially lead the country into the new Reiwa era. It will mark the end of the current Heisei era, which began when Akihito ascended the throne in 1989.
The 59-year-old Naruhito was educated in Oxford and become crown prince at the age of 28.
In 1986, he reportedly met his wife Crown Princess Masako Owada at a tea party. They married in 1993.
The couple's only child, Princess Aiko, was born in 2001. However, Japan's current law restricts females from inheriting the throne so she is not her father's heir.
Her uncle Prince Fumihito is first in line to the throne, followed by her cousin, 12-year-old Prince Hisahito.
