Japan's trade minister said the ministry had sold its 62% interest in Merlin to JX Nippon for $US237 million.
According to a report from Reuters, JX Nippon now has a stake in the venture to 98.4%, up from 36.4%.
The PNG government is selling off all upstream energy stakes previously held by the now defunct Japan National Oil Corp.
An LNG trader told Reuters he was surprised by the high buying price.
"Considering that there are other good projects out there and the market interest in this project is not that high, the price seems a little bit expensive," he said.
The PNG LNG project's start up date is set for 2014, and it is expected to produce 6.6 million tonnes of LNG per year.