He said the emergency powers, which included allowing the military to detain people without charge, would be lifted on Saturday, adding there was "no reason" to prolong them.
The imposition of the state of emergency was condemned by the European Union, the US and Fiji's Pacific neighbours, Australia and New Zealand.
The move had led to threats that aid would be cut.
Interim government
Fiji's interim government first lifted emergency measures imposed after the bloodless coup in May, in return for about $247 million in European aid.
Fiji's military chief Frank Bainimarama overthrew Qarase's government last December claiming his administration was corrupt and too soft on those responsible for a previous coup in 2000.
Qarase has lived in exile on the remote Lau group of islands since the coup, but returned to the capital Suva in September - a move which prompted Bainimarama to reimpose the state of emergency.
Bainimarama, who has proclaimed himself interim prime minister, accused Qarase of "irresponsible and inciteful" behaviour and threatened to send him back into exile.
Qarase started court action this week challenging the legality of the current administration.
Despite widespread international condemnation of last year's coup, Fiji's military chief has refused to relinquish power or set a date for fresh elections.