The original design, by British architect Zaha Hadid, had come under criticism as estimated building costs almost doubled, reaching $2bn (£1.3bn)
Mr Abe says the new stadium will still be completed in time for the games.
However, the delay means that the stadium will no longer be ready in time for the 2019 Rugby World Cup, which Japan is also hosting.
World Rugby said it was "extremely disappointed" and was "urgently seeking further detailed clarification".
Japanese officials say the contract with Zaha Hadid's architecture firm will be cancelled, and a new design chosen within six months.
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