The government has taken a decision that "the president stay as army chief", Information Minister Shaikh Rashid said at a news conference on Wednesday.
"I think there is no need to amend the constitution," he said, dismissing demands by powerful Islamist groups that Musharraf's continuation as army chief while remaining the president would be unconstitutional.
Musharraf, who seized power in a bloodless coup in October 1999, said last year he would give up his military post by the end of December this year under a deal reached with the Islamist Muttahida Majlis-e-Amal (MMA) alliance.
Musharraf has deployed 70,000
troops to hunt al-Qaida members
In return, the Islamists agreed to support a parliamentary vote to approve controversial changes to the constitution which empowered the president to sack the government and to dissolve the elected parliament.
The Islamist parties had paralysed parliament for almost a year before the deal on Musharraf's posts were reached with the ruling Pakistan Muslim League.
Musharraf said last week that 96% of Pakistanis wanted him to abandon his pledge to become a civilian ruler.
He said he would make a decision based on the constitution, popular demand and national stability.
"I think there is no need to amend the constitution"
information minister, Pakistan
As a key US ally, Musharraf has deployed some 70,000 troops in the rugged tribal belt to hunt down al-Qaida and its allies. He has said his government needed him in uniform because it was engaged in combating "terrorism".
"The President has taken the decision on the basis of resolution adopted by the Punjab provincial assembly, Pakistan Muslim League and other parties," said Information Minister Rashid.
The government can go in for an "act of parliament" if necessary to deal with Musharraf's dual roles, he said.
The general, who has been army chief since 1998, restored parliament after conducting elections in October 2002.
The MMA has said it would launch nationwide protests if Musharraf did not step down as the army chief.