|Protesters took to the streets in Algiers, the capital, in January to demand the government overturn the law [EPA]
Algeria's 19-year state of emergency will be lifted in the "very near future", state media has quoted Abdelaziz Bouteflika, the president, as saying.
During a meeting with ministers on Thursday, the president also said Algerian television and radio, which are controlled by the state, should give airtime to all political parties.
He added that protest marches, banned under the state of emergency, would be permitted across the country of 35 million except in the capital.
His comments come as anti-government protests escalate in Egypt and follows a wave of similar uprisings in other Arab states including Tunisia and Yemen.
Opposition groups in Algeria had recently made the repeal of emergency powers one of their main demands, ahead of a protest planned for February 12.
Last month several hundred pro-democracy protesters took to the streets in Algiers, the capital, demanding the government overturn a law banning public gatherings.
It came after riots erupted over rising food costs and unemployment.
Bouteflika said on Thursday the government should adopt new measures to promote job creation in the former French colony.
Tarek Masoud, a political analyst from Harvard University, told Al Jazeera that "Arab regimes are learning from the Egyptian experience".
"I think others who are maybe in similar positions to Hosni Mubarak, the Egyptian president, are learning from this experience and perhaps the counter-productive thing to do is to crack down on protests," he said.
The state of emergency was enforced in Algeria following a brutal 1990s conflict with Islamist fighters, which left tens of thousands of people dead.
The government had said at the time it needed the extra powers to fight groups linked to al Qaeda.
But on Thursday Bouteflika said he "ordered the government to immediately draw up appropriate provisions which will allow the state to continue the fight against terrorism until its conclusion, with the same effectiveness".
Al Jazeera and agencies