Mukhtar Abbas Naqvi, spokesman for the Hindu nationalist Bharatiya Janata party (BJP) said on Monday "this step will be equally effective to deal with terrorism".
The decision was taken at a meeting of BJP chief ministers in New Delhi over the weekend, Naqvi said.
The Prevention of Terrorism Act (POTA) was voted into law by the then BJP government in March 2002, in the wake of the 11 September 2001 attacks in the US and a raid by Kashmiri separatists on the Indian Parliament three months later.
The BJP-led alliance, which lost in the April/May polls to a Congress-led alliance, was criticised for using the law disproportionately against Muslims, especially in the western state of Gujarat where at least 2000 people were killed in sectarian riots in 2002.
POTA broadened the scope for the imposition of the death penalty and gave prosecutors extra powers to detain and interrogate suspects.
Soon after Prime Minister Dr Manmohan Singh came to power in May, his coalition government promised to scrap POTA while vowing to deal firmly with terrorism.
Singh's government had said it would table a motion calling for the repeal of POTA in the last session of parliament, which ended last month. But it failed as the sittings were paralysed by frequent adjournments and walkouts.
The BJP-led alliance was criticised for using the law disproportionately against Muslims
The BJP now administers six of India's 28 states, including Gujarat and Rajasthan.
"The response from the six chief ministers was very positive," Naqvi said.
"In fact, the suggestion to implement another law to deal with terrorism in case POTA is repealed, came from the chief ministers themselves," he said.
Naqvi said provisions of the proposed laws would be similar to POTA.