Japan's Supreme Court ruled Tuesday in favour of the central government in its bid to relocate a US airbase on Okinawa, dealing a significant blow to the plan's opponents led by the island's governor.

The Japanese and US governments want the base in the middle of a crowded city moved to a sparsely populated area for safety reasons. But many Okinawans want it relocated off the island altogether.

Okinawa is strategically situated in the East China Sea from where US troops and aircraft can react to potential conflicts throughout Asia. It has been a bastion of American military power since the end of World War II.

Okinawa governor Takeshi Onaga had tried to block efforts to reclaim land for the new offshore facility and he and Prime Minister Shinzo Abe filed rival lawsuits in a bid to settle the issue.

In September a high court ruled that the central government's position should be respected because it has "fundamental responsibility" for Japan's defence and diplomacy.

The Okinawan government appealed that decision but was dismissed by the Supreme Court Tuesday.

"I am deeply disappointed and concerned," Onaga told reporters after the ruling.

"Building the new base, which cannot gain support from local residents, is unacceptable," he said.

Tokyo and Washington first proposed moving the Futenma air base, a Marine Corps facility, back in 1996 but insisted it remain on Okinawa.

Local campaigners want a replacement to be built elsewhere in Japan or overseas, saying they cannot tolerate noise, accidents and crimes committed by US service members.

The Supreme Court decision came a day after the Marines resumed flights of a controversial hybrid aircraft after one crash-landed just off Okinawa's coast last week.

No one was killed when the MV-22 Osprey went down but the accident sparked fresh local anger. In response, the Marines suspended flights of the tilt-rotor aircraft in Japan pending an investigation but resumed them on Monday.

More than half the 47,000 American troops in Japan under a decades-long security alliance are stationed on Okinawa, the site of a major World War II battle that was followed by a 27-year US occupation.

A series of crimes including rapes, assaults and hit-and-run accidents by military personnel, their dependants and civilians have long sparked protests.