* Two taxi drivers, doctor test positive
* End of quarantine on board cruise ship targeted for Feb. 19
* 44 new cases confirmed aboard liner off Yokohama (Recasts with first Japanese death recorded)
By Rocky Swift and Elaine Lies
TOKYO, Feb 13 (Reuters) - A woman has died from the coronavirus in Japan, the first such death in the country since the epidemic spread from China, the health minister said on Thursday.
Two taxi drivers, one of them in the capital Tokyo, have also tested positive, raising the possibility that it could be passed on through their passengers.
On the Diamond Princess cruise liner quarantined in the port of Yokohama, 44 new cases were confirmed.
But in some good news for the 3,500-odd passengers and crew who have been stuck onboard since Feb. 3, Japan said it would allow some elderly people who have tested negative for the coronavirus to disembark ahead of schedule.
Japan is of the countries worst affected by the epidemic outside China, with 251 confirmed cases, including those on the Diamond Princess.
Health Minister Katsunobu Kato told a news conference on Thursday that a woman in her 80s living in Kanagawa prefecture, which borders Tokyo, had died. She was the first fatality in Japan, and the third outside mainland China.
The woman fell ill in January but only later showed symptoms of pneumonia and was hospitalised, then transferred to another hospital when her condition worsened.
Her infection with the coronavirus confirmed after her death, Kato said. The route of contagion was being investigated.
The minister also confirmed that a Tokyo taxi driver in his 70s had tested positive for the virus, along with a doctor in central Japan. A third person, also a taxi driver, in Chiba just east of Tokyo has also tested positive.
Kato announced earlier on Thursday that elderly passengers on the Diamond Princess who have pre-existing conditions or are in windowless rooms would be allowed to leave starting from Friday, rather than the originally targeted date of Feb. 19. They will complete their quarantine onshore.
The liner was quarantined on arrival in Yokohama, near Tokyo, on Feb. 3 after a man who disembarked in Hong Kong before it travelled to Japan was diagnosed with the virus that has now killed more than 1,350 people in mainland China.
About 80% of the ship's passengers were aged 60 or over, with 215 in their 80s and 11 in their 90s, according to Japanese media. The ship, managed by Princess Cruise Lines and owned by Miami-based Carnival Corp, typically has a crew of 1,100 and a passenger capacity of 2,670.
The additional 44 cases included 43 passengers and one crew member, Kyodo news agency said. With the number of those infected on the cruise ship now up to 218 plus one quarantine officer, concerns have been raised about conditions on the ship.
Brandon Brown, a health expert at the University of California, said that despite some passengers' concerns, recycled air on the ship did not pose a risk.
"The more likely explanation for the spread of infection during quarantine on the ship is the high passenger interaction due to close quarters and limited personal space on any cruise ship," Brown said.
Indian media aired videos in which Indian crew members said they were working in close quarters and appealed for help from Prime Minister Narendra Modi.
A health ministry official could not confirm how many of those infected so far on the ship were crew.
Also on Thursday, Prime Minister Shinzo Abe said the cabinet would decide on Friday on spending 10.3 billion yen ($95 million) from the budget reserve to respond to the coronavirus.
Tokyo 2020 Olympics President Yoshiro Mori repeated that the Summer Olympics due to held in the capital from July 24 would go ahead as planned.
"I would like to clearly reiterate that cancellation or postponement of the Tokyo Games are not being considered," he said at the start of a meeting with International Olympic Committee Coordination Commission Chief John Coates.
Additional reporting by Antoni Slodkowski, Kiyoshi Takenaka and Elaine Lies; Writing by Linda Sieg and Elaine Lies; Editing by Angus MacSwan