Tokyo 2020 organisers said it would use the system as it has sold more tickets than the available capacity under the new COVID-19 rules for spectators.

Venue capacity will be limited to either 50 per cent or a maximum of 10,000 people.

Organisers had given spectators another opportunity to be refunded due to the latest restrictions, with 840,000 tickets handed back out of a total 4.48 million sold.

The number of tickets will be reduced by 910,000 to 2.72 million, with Tokyo 2020 adding that those successful in the lottery will be confirmed on July 6.

That is 17 days before the Opening Ceremony of the Olympics.

Athletics will be one of the eight sports using the lottery system, as well as baseball, football, golf, modern pentathlon, rugby sevens, softball and surfing.

Fans will be required to wear masks at all times and have been asked to refrain from cheering, high-fiving or linking arms with others, in a bid to prevent the spread of COVID-19.

Spectators from overseas have been banned completely, while Tokyo 2020 President Seiko Hashimoto has not ruled out barring domestic fans too if COVID-19 cases spike.

"We may potentially bring down the number of spectators, a cap on the spectators or no spectators," she said while speaking via a translator, according to NBC News.

The Tokyo 2020 Olympics are scheduled to take place from July 23 to August 8, followed by the Paralympics from August 24 to September 5.