After minting 4.8 million commemorative coins, Japan said on Wednesday it must change the design due to copyright infringement.
The original design of the coin, celebrating the centenary of Japanese emigration to Brazil, showed bronze sculptures of parents and a child standing in Santos, Brazil, where the first batch of immigrants landed in 1908.
But the Brazilian sculptor of the work refused to let the design be used for the 500-yen (five dollar) coin, the Japanese finance ministry said.
Japan originally announced the creation of the coin in April 2007, with an aim to distribute it by the end of March 2008, believing that an immigrants association in Brazil owned the bronze memorial.
But the association later found that the artist also held the right to his work.
The new design will feature the ship that took the first Japanese immigrants to Brazil, placed over the shape of the Latin American nation.
"The minted commemorative coins are made of the same materials as the regular 500-yen coin so we will simply recycle them," said a finance ministry official.
The ministry will spend five to 10 million yen (USD 50,000 to USD 100,000) redesigning the coin.
"We had an agreement with the immigrants association about legal technicalities. So technically we could ask the association for compensation, but doing that would go against the spirit of the celebration," the official said.
The coin will be distributed from June 18, when Brazil will also distribute its own commemorative coin related to Japanese immigration.