The disaster declaration was implemented on April 7 across Japan, but it largely depended on voluntary compliance, with nearly no penalties if people did not comply with Government requests.
The government is expected to approve the budget, which will also include subsidies to help companies pay rent and wages, at a cabinet meeting on Wednesday.
Abe stated that the lifting of the State of Emergency does not mean that the country has reached the end of the outbreak and that the "goal is to balance preventive measures and the economy until vaccines and effective drugs become available".
The package, to be funded by a second supplementary budget, would follow a record 117 trillion yen spending plan deployed last month.
"If we lower our guard, the infection will spread very rapidly", he said.
Although the human toll has been less severe than in other parts of the world, the economy - already struggling from the effects of natural disasters and a consumption tax hike - has suffered.
Also Monday, Japan's professional baseball league announced that its season will begin on June 19 after a delay of almost three months because of the outbreak. Conditions in each region will be examined every three weeks to determine whether measures can be loosened. He has been criticized for delaying an emergency declaration when local cases began to surge and for being slow to close Japan's borders to Chinese visitors. Analysts expect Japan's economy to suffer a contraction of nearly 22% this quarter, the deepest for records back to 1955.
Abe said late Monday that the state of emergency would be lifted for all of Japan, including Tokyo and its surrounding areas, and that the country managed to get the outbreak under control in under two months.
Japan declared the state of emergency on April 16 after fearing a second wave of infection from the virus, and further extended it in early May. However, many Tokyo museums are treading lightly and will instead open their doors around mid-June.
Unlike a European-style hard lockdown, Japan's state of emergency is soft and largely a request for people to stay at home and for non-essential businesses to close or operate shorter hours, a strategy aimed at minimising the economic damage.
However, the city and host of the 2020 Olympics, Tokyo, saw a return to double figures for confirmed cases in a day, suggesting that the threat of infection is still there. The total for the past seven days has been below the threshold of 70, or 0.5 people per 100,000, which the government has outlined as being needed to lift the emergency.
Now, new cases number in the dozens, at most.