The Development Bank of Japan will acquire an equity interest, entering as a new shareholder.
The share buyback was valued at ¥8.2 billion ($88.6 million).
Tokyo Century Corporation and JAL will keep their existing shareholding positions.
Following the divestment, Jetstar Japan would change its name to a new brand.
The airlines said today’s announcement followed a February non-binding memorandum of understanding.
The transition is expected to be done by June next year.
Japan last year was the world’s fifth-biggest passenger market, after the US, China, UK and Spain.
Jetstar Japan operates to 15 cities in Japan.
It is headquartered at Narita, home of Tokyo’s second-biggest airport.
It also flies from Japan to international destinations including Manila, Bali and Hong Kong.
The airline operates Airbus A321neo and A320 aircraft.
Jetstar announced plans to establish the airline in 2011 and the airline started flying the following year.
Last year, Qantas announced it would close Singapore-based Jetstar Asia.
It said that would lead to redeployment of more than a dozen aircraft to New Zealand and Australia.
Qantas today said the Japan divestment would have no impact on Qantas or Jetstar international services between Australia and Japan.
It said the deal would also not affect any codeshare arrangements with JAL.
John Weekes is a business journalist covering aviation. He previously covered consumer affairs, crime, politics and courts.
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