Itochu will acquire an 8% stake for $800m, while Mitsui will pay $700m for a 7% interest.
The Jimblebar mining hub and resource, which is wholly owned by BHP, is located in Western Australia's Pilbara region, which is known for soil rich in iron.
BHP Billiton iron ore president Jimmy Wilson said, "We are pleased to extend our successful, long standing joint venture relationship with Itochu and Mitsui."
The new Jimblebar mine is expected to have initial production capacity of 35 million tonnes per annum and when fully operational is expected to touch 220 million tonnes per annum.
The deal will be reviewed by the Australian Foreign Investment Review Board and is expected to be completed in September 2013.
Currently, BHP and the two Japanese trading houses jointly own three iron ore mines in the Pilbara region. These three mines provide 27.9 million tonnes to the two Japanese firms which are primarily exported to China.
The latest deal will provide an additional five million tonnes of iron ore annually for Itochu and Mitsui, which they expect to export to other Southeast Asian markets.
BHP plans to use a part of the proceeds to reduce its debt amid tough market conditions.
Even though prices of iron ore have declined, the demand is expected to grow with the rise in steel production in Southeast Asia.
Steel production is expected to touch 2.3 billion tonnes by 2025 compared to 1.5 billion tonnes in fiscal 2012.
Image: Iron ore pellets are used in steel production. Photo: Lars Lentz.