The new ranking is the highest level on an international scale following new assessments of radiation leaks from the Fukushima Dai-ichi plant.
Japan's prime minister is urging the public not to panic.
Japanese officials said the leaks from the Fukushima plant so far amount to a tenth of the radiation emitted in the Chernobyl disaster, but said they eventually could exceed Chernobyl's emissions if the crisis continues.
Officials from Japan's Nuclear and Industrial Safety Agency said that the cumulative amount of radioactive particles released into the atmosphere since the incident had reached levels that apply to a Level 7 incident. Other factors included damage to the plant's buildings and accumulated radiation levels for its workers.
Continued aftershocks following the 9.0-magnitude quake on March 11 are slowing down work on at the nuclear plant.
The Associated Press contributed to this report.