Japan's defence ministry says Moscow deployed 3,500 troops on the two larger islands as part of an on-going military build-up.
Kyodo news agency, citing a passage from the guidelines, reported that the upgrade will "enable fighter jets to be operated from existing warships, if necessary, to improve the flexibility of their operation".
"Under the drastically changing security environment the government will make every effort to protect the Japanese people and their peaceful lives in accordance with the National Defense Program Guidelines", Japanese Chief Cabinet Secretary Yoshihide Suga told a briefing.
Japan has adopted new guidelines, calling for converting a destroyer into Japan's first carriers, advanced US-made fighters and increased defence spending.
Four islands of the archipelago's 56 were occupied during World War II by Russian Federation, which has been involved in a dispute with Japan over their sovereignty ever since.
In a separate plan also endorsed by the cabinet Tuesday, Japan said it would buy 42 F-35s over the next decade, with the F-35B variant widely considered the likeliest candidate.
Mr Suga, meanwhile, said at a regular news conference that the conversion of the Izumo will be "within what is allowed under the Constitution", given that the goal is to strengthen the air defence of Japan's isolated remote islands, including the Ryukyu island chain that stretches from Kyushu to Taiwan.
Defence officials also pointed out that Japan will stop using a final assembly and check-out (FACO) facility for the country's F-35As from FY 2019 and start buying completed F-35As and F-35Bs to reduce procurement costs.More news: Michael Flynn associate charged with illegal lobbying for Turkey
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Japan's Ministry of Foreign Affairs (MoFA) lodged an official protest over the issue in the same month.
Even after their conversion, the Izumo will be designated as multi-purpose helicopter destroyers, and will not have any permanently assigned F-35B squadron.
In addition to the aircraft carriers and fighter jets, Japan will also be acquiring long range cruise missiles. The refitting of another helicopter carrier into a second aircraft carrier would follow.
But some experts, meanwhile, have criticised the government's arguments as spurious.
The latest national defense guidelines, which are also expected to lead Japan to newly introduce USA -made F-35B fighter jets for defense of far-flung islands, were adopted as the government sees the security environment increasing in uncertainty amid China's expanding military activities and rapid advances in technology.
As a result, Japan may end up just having "floating runways" which may not be useful for most substantial missions, including defence of the remote islands.
"Compared with China's aircraft carrier, the Liaoning, [which is] capable of loading some 20 fighters, or 100,000 tonne-class U.S. carriers capable of transporting about 50, Izumo would be too small to use for offensive operations", said Noboru Yamaguchi, vice-president of the International University of Japan in Niigata Prefecture.
It says 188 households are expected to move into them next week.