The Sega Saturn could do it* for sure, and probably the original Playstation** as well. The only other contenders I can think of that predate those are the Neo-Geo and Amiga CD32, and when when I looked around I see evidence that would lead me to believe neither could do it -- some games achieved a fake sort of 50% transparency by rendering/not-rendering something on alternate frames, though.

There might be some arcade hardware that predates those, but those aren't console hardware, obviously.

* The Saturn's support seems not to be pervasive throughout its hardware though -- The background GPU seems to be able to do full-featured alpha, and the sprite engine (which generates draw calls to the foreground GPU) seems to have a couple different 50% transparency modes, but I can't find any direct mention of whether the foreground GPU supports full-featured alpha when used directly.

** The playstation GPU was actually a programmable processor, so it seems likely that one could have done transparency, but its hard to say yes or no because the hardware function isn't fixed. Whether or not it could be achieved in practice is probably bound by whether the rendering needs of a particular game left enough bandwidth available to either read back pixels out of the frame buffer (and of course, if the hardware could do this at all) or do a draw call with two source images.

The PS1 had transparency modes and a single bit alpha (most of the time you used 16 bit R5G5B5A1 textures, although normally with a 16 colour palette - 16 bit colour and 256 colour palettes were supported but there wasn't much VRAM available. There was also a 24 bit colour mode but that was only for static images not polygons). The modes were 50-50 blend, additive, and subtractive. But you could tint the RGB with a different value at each vertex, so you could fade the RGB down to zero by grey shading the tint colour but that only worked for additive blending.

The SNES allowed blending between layers. I think sprites could be blended, although since sprites all make up a single layer what you can do with this is limited. I need to recheck to make sure.