Prime Minister Shinzo Abe was forced to apologise to residents of the devastated northeastern region of Tohoku, which is still recovering more than six years on, after Masahiro Imamura sparked outrage with his comments.
"It was good that it (the disaster) occurred over there in Tohoku," he said late Tuesday.
"If it had been close to the capital zone, there would have been enormous damage," he added, referring to the vast Tokyo conurbation.
A massive undersea quake on March 11, 2011 sent a tsunami barrelling into Japan's northeastern coast, leaving more than 18,500 people dead or missing and sending three reactors into meltdown at the Fukushima nuclear plant.
After submitting his resignation, Imamura said he deeply regretted the comments.
"I caused great trouble to the people of Tohoku and hurt their feelings. I'm very sorry," he told reporters, bowing.
Abe, who was attending the same political gathering on Tuesday, apologised to guests soon after Imamura's remarks, saying they were "extremely inappropriate".
Imamura's words "hurt the feelings of people in the disaster-hit areas", a grim-faced Abe said Wednesday in further comments on the incident.
"As prime minister, I'd like to apologise deeply to the people in the disaster-hit areas," he said.
Abe said he will replace Imamura with Fukushima native and veteran politician Masayoshi Yoshino.
It was not the first time Imamura has courted controversy.
He came under fire earlier this month after he said people who had not yet returned to areas of Fukushima recognised by the government as safe to live in are "responsible for themselves."
He then attempted to oust the journalist whose question led to the remarks at a news conference, shouting: "Get out!"
Abe's approval rating, although still above 50 percent, has recently fallen, as scandals erode public confidence in a government now in its fifth year.
A vice economy minister resigned last week after a magazine reported on an extramarital affair.
That came just weeks after the resignation of Shunsuke Mutai, a vice minister for reconstruction, who had joked last month the "(rubber) boot industry made money" following a deadly typhoon which claimed 19 lives in the northern town of Iwaizumi last year.
Abe took power in December 2012 vowing to end years of on-and-off deflation and revitalise the world's third-largest economy.
He was also elected on the back of widespread frustration with the previous administration's handling of the 2011 nuclear disaster and perceived mismanagement of ties with key ally the United States.
But he has recently been forced to distance himself and his wife from a nationalist school operator whose purchase of state land to build a primary school at a huge discount has drawn allegations of shady dealings.