The last time Japan had fewer children was in 1908, and children's share of the general population - 13.5 percent - is the lowest ever recorded.
Japan now has the lowest percentage of children among 31 major countries, the report said.
With a declining birthrate and high life expectancies, Japan faces an unprecedented demographic shift that is expected to strain government services and lead to labor shortages.
In 12 years, the percentage of children is projected to drop to 10.8 percent, while the proportion of those 65 and older is likely to rise to 29.2 percent, according to the Ministry of Internal Affairs and Communications.
The government forecasts that by 2040, children will be only 9.3 percent of the population and the over-65 portion will grow to 36.5 percent.