With less than 500 days to go until the opening ceremony, Prime Minister Shinzo Abe told reporters he had re-appointed the "experienced" Shunichi Suzuki, who had already served as Olympics minister between 2017-2018.
"I hope Mr Suzuki... will recover trust (among the public) and lead us towards a successful Olympic and Paralympic Games," Abe told reporters.
Suzuki's appointment came after his predecessor Yoshitaka Sakurada quit late Wednesday after comments seen as disrespectful to survivors of the 2011 tsunami.
He reportedly told a political gathering that securing the re-election of a local lawmaker was more important than recovery in the area hit by the quake-triggered tsunami and nuclear meltdown that claimed more than 18,000 lives.
More than 50,000 people have not returned to their home towns following the disaster, and Japan has dubbed the 2020 Games the "Reconstruction Olympics" in a bid to showcase recovery in affected regions.
He also held the cybersecurity portfolio and became a laughing stock after he admitted he "does not use computers."
In February, he was forced to apologise after suggesting that the leukaemia diagnosis of star Japanese swimmer Rikako Ikee could dampen enthusiasm for the Games.
The shock announcement of 18-year-old Ikee's diagnosis had prompted an outpouring of support in Japan, but Sakurada came under fire after responding to the news by saying: "She is a potential gold medallist... I'm really disappointed."
"When one person leads, she can boost the whole team. I am slightly worried that this type of excitement could wane," he said.
After a backlash, he sought to clarify his stance and admitted his comments had "lacked consideration."
Sakurada's resignation also came only a month after the head of Japan's Olympic Committee Tsunekazu Takeda announced he would step down from his position in June.
He also stepped down from the International Olympic Committee, after French authorities said they believed they had evidence of corruption in the awarding of the 2020 Games.
Takeda has denied any wrongdoing and said his decision to quit was related to a desire to pass the role on to a younger generation.
Japanese politicians are no strangers to foot-in-mouth gaffes.
And in 2017, he was forced to retract comments in which he cited Adolf Hitler in a bizarre reference about leaving a legacy in politics.
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