The Defense Security Cooperation Agency, which oversees foreign arms sales, said Japan had requested the upgrades as part of the modernization of two of its Atago class destroyers, Reuters reported Monday.
US lawmakers now have 30 days to block the deal, although such action is rare.
If approved, Lockheed would be the prime contractor. The sale would include the Aegis combat systems, new processors for radar systems, display consoles and video wall screens and more capable guns and sensors.
The Pentagon said the proposed sale would contribute to US security objectives by providing Japan with a significantly improved air warfare capability.