Japan has earmarked $8.6 million for the project and will host a meeting in November for the three governments to boost research in Linux, including flavors that better handle Asian languages.
Like Germany, France and other European countries, Japan, South Korea and China long have been wary of leaving too many government computers and networks dependent on Windows. Many experts view Windows as too prone to computer viruses and hacking.
In China, programmers developed a homegrown Linux version called Red Flag Linux a few years ago. That software has been touted by Beijing as a secure alternative to Windows.
But the latest multi-government attempt to promote Linux is unprecedented in its scope, although some remain skeptical about its prospects.
"Linux is about to become an explosive hit in Japan," said Hajime Watanabe, chief executive of Tokyo-based Linux supplier Turbolinux Inc. "The Chinese are determined to say goodbye to Mr. Bill Gates. The South Korean government is thinking seriously about it. And the move is starting to take off in Japan."
Microsoft spokesman Mark Martin said the company shares the Asian governments' desire for strong technology industries.
But the Redmond, Wash.-based company said "consumers and market forces, not government preferences should determine software selection and development."
The company said it has been offering governments access to its secret Windows code to alleviate their security concerns.
"We are eager to address any government concerns about Microsoft products," he said in an e-mail. "Microsoft will continue to work hard to earn government trust and business and build on the strong relationships we hold today."
Microsoft has identified Linux as one of the biggest threats to its success as businesses, governments and others around the world try out or switch to the open-source software.
In the past year, in addition to allowing access to Windows code, Microsoft has also offered steep discounts to government agencies and school systems to buy its software more cheaply.
Takashi Kume, a deputy director at the Japanese Trade Ministry, stressed that the Linux effort is mostly about sharing research findings and encouraging exchange among experts, reducing government outlays on Windows license and maintenance fees, and promoting Linux use in the private sector.
"We are not trying to come up with a "Rising Flag" operating system," he said, referring to the Japanese flag that depicts a red sun in the backdrop of white. "That would be a waste of money."
The Beijing press office of the Chinese Ministry of Information said it did not know about the three-country Linux project. But South Korean and Japanese officials said Chinese government representatives expressed interest in the project during initial talks.
"Having an option other than Microsoft Windows brings more choices to consumers," said Sangjin Lee, a director at the South Korean Information and Communication Ministry. "We do need some kind of common ground."
The goal is to hammer out a Linux standard that can be shared in the three markets, although specific targets and areas of cooperation are still undecided, Lee said. Proponents say the initiative makes sense because of the common software requirements to handle Asian languages, which have far more characters than Western alphabets.
Even so, whatever technology standards emerge would be available outside Asia as well.
The collaboration comes as analysts are predicting rising Asian sales of networked gadgets that increasingly use Linux - such as cell phones and Internet-connected household appliances.
The talks are expected to include representatives from electronics makers such as Japan's Matsushita Electric Industrial Co., or Panasonic, and Samsung Electronics Co. of South Korea.
Yoshiaki Kushiki, the Panasonic managing director overseeing the company's Linux projects, said Panasonic is already developing digital TVs that use Linux.
The downside, he acknowledged, is that companies are going to have a hard time differentiating their products through open-source systems.
The Linux project may be Japan's biggest software challenge to the United States since the 1980s. Then, Japan's Tron standard was criticized as a possible trade barrier by the United States and viewed as a potential target of sanctions.
Versions of Tron are still used in coding and other software, but it never developed into a major challenge to Windows. Their use is minuscule compared to Unix or Microsoft products.
"If they were to try again, Linux would be a great place to start," said Benjamin Wedmore, an analyst with HSBC Securities in Tokyo.
But Wedmore remained skeptical because standards tend to emerge from companies - not governments - even though companies have great difficulties in trying to agree.
By Yuri Kageyama