Bainimarama said he would surrender presidential powers next week when Fiji's Great Council of Chiefs would be asked to reappoint Ratu Josefa Iloilo to the presidency.
Bainimarama named Jona Senilagakali, a military medic with no political experience, as caretaker prime minister and said a full interim government would be appointed next week to see the country through to elections that would restore democracy sometime in the future.
"The takeover will not be permanent, tomorrow I will summon the chief executive officers and charge them with the duty of running their own ministries until an interim government is appointed," Bainimarama said.
"We trust that the new government will lead us into peace and prosperity and mend the ever-widening racial divide which currently besets our multi-cultural nation."
Earlier Qarase had told Fiji radio that his house had been surrounded by heavily armed troops and his transport confiscated.
He said that after the military disarmed the country's police force he was powerless to stop a military takeover.
"The government they want to set up will be totally illegal," Qarase told a small group of reporters inside his house in Suva, where he said he was under effective house arrest.
"What the military commander has done has raped our constitution."
"The takeover will not be permanent"
Commodore Frank Bainimarama,
head of Fiji's military
"I did not think it was in Australia's national interest to become involved"
Prime Minister of Australia
New Zealand announced it was suspending defence ties with Fiji and would ban its military officers from travelling to the country.
Bainimarama is believed to have children living in New Zealand.
Helen Clark, the prime minister, said in Wellington: "This is an outrage what is happening in Fiji."
Britain also announced it was suspending military aid to Fiji, and Don McKinnon, the secretary-general of 53-member Commonwealth of Britain and its former colonies, said Fiji was likely to be suspended from the group later this week.
Australia said it would impose similar measures soon.
In Canberra, John Howard, the prime minister of Australia, said he had turned down a request from Qarase for military help.
"I did not think it was in Australia's national interest to
become involved. The possibility of Australian and Fijian troops firing on each other in the streets of Suva was not a prospect that I, for a moment, thought desirable," Howard said.
Australia had sent three warships to the waters off Fiji in case it needed to evacuate its nationals from the country.
Bainimarama had said that his soldiers would oppose with force any attempt at foreign intervention in the crisis.
Bainimarama has been engaged in a long-running stand-off with Qarase's government, claiming it is corrupt and has been soft on those behind a previous coup in 2000.
|Bainimarama has said elections will be |
held to restore democratic rule
He has repeatedly said that unless Qarase agreed to a series of military demands he would carry out a "clean up" of the government.
On Monday troops moved in to disarm the country's police tactical unit, the only division of the police allowed to carry weapons.
Bainimarama said the move was intended to avoid the police using their weapons against the military.
In the following hours large numbers of troops were deployed across Suva, setting up roadblocks and checking vehicles, apparently looking for members of Qarase's government.
Roadblocks were also set up in other major towns, including the main tourist hub of Nadi.
Qarase, who won a second term in office in May elections, had said earlier that Bainimarama’s threats to topple him amount to treason.