TOKYO (Reuters) - Japan formally decided on Tuesday it would expand its ballistic missile defense system with U.S.-made ground-based Aegis radar stations and interceptors in response to a growing threat from North Korean rockets.

FILE PHOTO - The Missile Defense Agency conducts the first intercept flight test of a land-based Aegis Ballistic Missile Defense weapon system from the Aegis Ashore Missile Defense Test Complex in Kauai, Hawaii, December 10, 2015. REUTERS/U.S. Missile Defense Agency/Leah Garton/Handout via Reuters

A proposal to build two Aegis Ashore batteries was approved by Prime Minister Shinzo Abe’s Cabinet.

The sites without the missiles will likely cost at least $2 billion and are not likely to be operational until 2023 at the earliest, sources familiar with the plan told Reuters earlier.

“North Korea’s nuclear missile development poses a new level of threat to Japan and as we have done in the past we will ensure that we are able to defend ourselves with a drastic improvement in ballistic missile defense,” Japanese Minister of Defence Itsunori Onodera told reporters after the Cabinet meeting.

The decision to acquire the ground version of the Aegis missile-defense system, which is already deployed on Japanese warships, was widely expected.

North Korea on Nov. 29 tested a new, more powerful ballistic missile that it says can hit major U.S. cities including Washington, and fly over Japan’s current defense shield.

That rocket reached an altitude of more than 4,000 km (2,485 miles), well above the range of interceptor missiles on Japanese ships operating in the Sea of Japan.

North Korea says its weapons programs are necessary to counter U.S. aggression.

The new Aegis stations may not, however, come with a powerful radar, dubbed Spy-6, which is being developed by the United States.

Without it, Japan will not be able to fully utilize the extended range of a new interceptor missile, the SM-3 Block IIA, which cost about $30 million each.

A later upgrade, once the U.S. military has deployed Spy-6 on its ships around 2022, could prove a costly proposition for Japan as outlays on new equipment squeeze its military budget.

Initial funding will be ring-fenced in the next defense budget beginning in April, but no decision has been made on the radar, or the overall cost, or schedule, of the deployment, a Ministry of Defence official said at a press briefing.

Japan’s military planners also evaluated the U.S.-built THAAD (Terminal High Altitude Area Defense) system before deciding on Aegis Ashore.

Separately, Minister of Defence Itsunori Onodera said this month Japan would acquire medium-range cruise missiles it can launch from its F-15 and F-35 fighters at sites in North Korea, in a bid to deter any attack.

The purchase of what will become the longest-range munitions in Japan’s military arsenal is controversial because it renounced the right to wage war against other nations in its post-World War Two constitution.