The admission by the Finance Ministry, sources close to the matter said, will likely intensify calls from the opposition camp for Japanese Finance Minister Taro Aso to resign to take responsibility for the favoritism scandal.
As the scandal also sees Abe deeply entrenched, some opposition parties are calling for the prime minister himself to step down, backed by the latest media polls which show the support rate for Abe's cabinet has tumbled from 54 percent to below the 50 mark at 48 percent.
The records that were altered pertain to a shady deal reached to sell a plot of state-owned land to Osaka's Moritomo Gakuen, a nationalist school operator, in June 2016.
The controversial school also had ties to Abe's wife, Akie, who at one point was going to be the school's honorary principal.
Akie was initially named honorary principal at Moritomo's elementary school, but soon relinquished the post after the scandal involving the cut-price state land deal came to light.
Opposition parties said the Finance Ministry has hugely reduced the land price, in part, because of Akie's involvement in the school.
According to senior ruling Liberal Democratic Party (LDP) members, 14 of the original documents were altered at the request of the Finance Ministry after the scandal came to light in February 2017.
In the version of the papers submitted to the Diet, along with Akie Abe's name being removed, the names of several senior politicians had also been removed when it was sent to the Diet.
At the Diet, the opposition parties simply claimed the documents were just copies of the originals, although the Asahi Shimbun newspaper reported that the original documents had been tampered with.
National Tax Agency head Nobuhisa Sagawa, who resigned on Friday, was previously in charge of taking care of the state land sale.
He stepped down to take account for the confusion he'd caused and was under fire for potentially lying in parliament while serving as director general of the ministry's financial bureau.
The documents, allegedly, were altered to bring them in line with Sagawa's answers when he was being quizzed in parliament.
He was under pressure for allegedly making false parliamentary remarks while serving as director general of the ministry's financial bureau.
In a recent press briefing on the matter, Japan's top government spokesperson Chief Cabinet Secretary Yoshihide Suga said he did not see any reason for Aso to resign.
"Aso should lead the ministry's thorough investigation to get to the bottom of the will scandal," Suga said, adding that the government will "deal seriously with the issue."
Meanwhile, despite a series of parliamentary boycotts due to the issue, the opposition camp has intimated that it will definitively get to the bottom of the long-running scandal and ensure that those culpable, including Aso, Abe and others, will be publicly held to account.