The subscription service will use satellite modems and connect to the Net via Microsoft's proprietary online service, Microsoft Network.
The high-bandwidth service will offer information about entertainment, business information, and online shopping malls to be created by Nintendo and will be integrated with MSN content.
"If I spoke Japanese, I would want to subscribe to this service myself," Microsoft chairman Bill Gates said in a prepared statement.
Users will need a satellite dish, then install a satellite modem on a Windows PC to receive data continuously with no hourly fees and without tying up a phone line. This approach will circumvent Japan's notoriously expensive phone charges. About 10 million Japanese households already have the necessary satellite dish.
Microsoft and Nintendo, along with Nomura Research Institute, a systems integrator owned by Japan's largest securities firm, will invest a total of $9 million to launch the service.
Nintendo has posted a Japanese language Web page.