But there's a catch.
As part of the Treaty of Mutual Cooperation and Security between the two countries, the United States is granted the right to certain defense facilities. In exchange for the land, the Japanese government built several new helipads for the US military to use on its southernmost island of Okinawa.
Yet the handover has done little to assuage the ire of activists, who've campaigned for decades, to remove US bases altogether from Okinawa.
"We feel betrayed by the (Japanese) government," Takashi Kishimoto, a spokesman from an anti-US base activist group Peace Okinawa, told CNN.
"From our point of view, the US military (is) giving back something (it doesn't) want while having new Osprey runways built. Okinawa alone is host to 74% of the US's military bases in Japan. The return of this land only reduces this presence to 71%," he said.
Opposition to US military presence remains strong
The Northern Training Area, also known as Camp Gonsalves or the Jungle Warfare Training Center, is a 19,300-acre US installation in northern Okinawa.
The land has few buildings and roads and is home to several species of endangered animals. The partial handover of 9,909 acres of this area is part of a larger plan to return facilities south of Kadena and the Futenma base in the future. The United States occupied Okinawa until 1972.
The handover reduces the amount of US-controlled land on Okinawa by 17%, according to the US military.
"This decreased training area on Okinawa will not deteriorate our commitment or our ability towards working with the Government of Japan and our partners in the Japan Self Defense Force in mutual defense of this country," Lt. Gen. Lawrence D. Nicholson, commanding general of III Marine Expeditionary Force and Marine Forces Japan, said in a statement.
Nevertheless, some argue that the construction of the helipads in exchange for the land has further fueled anti-US military base sentiments among Okinawans.
"The problem is that these helipads have been constructed too close to residential houses, and they're aimed to deploy MV-22 Osprey (planes), which are hazardous to local people and the environment," Maki Kimura, a political scientist from University College London, told CNN.
Just last week, a MV-22 Osprey crash-landed into the sea southwest of Okinawa, causing concern among residents.
US presence a sore point in relations
As part of a deal with Japan after World War II, the United States has roughly 26,000 troops and several bases in Okinawa.
The US presence has been a sore point in relations between the prefectural government and Tokyo as many Okinawans, including Takeshi Onaga, the prefectural governor, strongly object to accidents and alleged crimes attributed to the US military.
Okinawa makes up less than 1% of Japan's total land area, but it has the largest US military presence.
In a handover ceremony Wednesday in Tokyo, Japanese Prime Minister Shinzo Abe expressed his desire to cooperate with the United States for regional peace and stability while reducing the burden of the US military presence on Okinawa.
But in Okinawa, sentiments remain divided, with the Okinawa prefectural governor announcing his refusal to attend the handover ceremony in a statement released earlier this month.
"This handover isn't enough," Kouji Ida, the deputy councilor from the Okinawa prefectural government's military base affairs division, told CNN.
"The helipads will be used to launch Ospreys, and we fear there may be more crashes. Ultimately, we hope the presence of the US military bases will continue to shrink," Ida said.
It's important to understand the context surrounding the deal, according to Gavan McCormack, an emeritus professor and Asia expert at the Australian National University.
"The whole of Okinawa is an American military base, and there's deep anger there as the Okinawans don't feel like the bases are there for their defense," McCormack told CNN.
"The people aren't only concerned by the noise pollution caused by the Ospreys but the danger to life and limb."