"Little Sisters Paradise! 2", which was published last month, will be classified as an "unhealthy publication" that must be kept out of children's reach.
The comic, a spinoff from an adult-orientated computer game with the same title, says on its cover: "More naughty days of a brother and five sisters."
A panel of experts for Tokyo Metropolitan Government "has reached the decision that (this manga) meets the criteria. We are moving to publicise the decision" formally on Friday, said an official in charge of youth affairs.
Manga is a style of Japanese comic book typically aimed at adults as well as children.
The ruling only affects stores in the Japanese capital but does not bar them from stocking the title, which will remain freely accessible to those aged 18 or older in adult sections of bookshops.
Three years ago, Tokyo tightened an ordinance stopping children buying publications that "significantly stimulate sexual feeling".
"Little Sisters Paradise! 2" is the first publication to fall foul of the 2011 amendment that expanded the rules to cover pictures or text that "glorifies" incest.
Kadokawa, the major Japanese publishing house that released "Little Sisters Paradise! 2", declined to comment.
Japan's attitude to sexually explicit material often comes in for criticism.
The possession of pornography involving children is not illegal, but its creation and distribution has recently been criminalised.
The country's porn industry is huge and visitors note the ubiquity of sexual imagery, particularly the prevalence of pictures showing young-looking girls in school uniforms.
It is not uncommon to see adults on trains reading manga that would be deemed risque in other societies.
However, strict rules mandate that genitalia must be obscured.
The UN Children's Fund (UNICEF) has long pressed Japan to tighten its child porn rules, which it says exacerbate a global problem already made worse by the Internet.
Manga images, while they might be mere drawings, can be considered pornographic under internationally shared norms, said Hiromasa Nakai, spokesman for the Japan committee for UNICEF.
"Many people agree that there are horrible manga images are out there and they need to be dealt with," he said.
The move to tighten rules on sales of explicit material to children came partially in response to criticism from foreign campaign groups.
But it faced resistance at home from manga artists, free-speech advocates and publishers, who said it would impinge on freedom of expression and allow authorities to make arbitrary decisions about art.
Strong societal memories of strict state censorship in the run up to Japan's disastrous entry into World War II play into such debates, with dissenters warning of the danger of allowing the government to control the press.