Katherine, the territory’s third-largest town, remained isolated by floodwaters today.
About 600 people evacuated their homes, as the waters rose, spending the night in one of three shelters set up in schools.
Many will return to find their homes or businesses seriously damaged by the water.
NT Police Minister Paul Henderson said the declaration is for the Top End of the NT north of Daly Waters.
"The commissioner has advised me that due to the extent of flooding throughout the region, extraordinary measures are required in order to allow police and counter disaster authorities to do their job as effectively as possible," Mr Henderson said.
Under the state of emergency powers, authorities have the power to force people in danger to evacuate, commandeer government and private sector resources, enter property, and request people to secure or move items that pose a danger to the community.
Croc attack
During the flooding a teenager trapped in a tree waiting to be rescued was bitten by a crocodile.
Police say the 16-year-old was one of three boys evacuated by authorities after spending most of Thursday afternoon stuck in the tree in Katherine.
The unnamed teenager was treated by ambulance officers for minor lacerations but did not require further treatment.
"The boys told police they had been stuck in the tree for most of the afternoon yelling for assistance, but to no avail," police said in a statement.
Police believe the boy was probably bitten by a freshwater crocodile, which are widespread across northern Australia but not usually considered a threat to humans - unlike the larger and far more dangerous saltwater species.
Croc hunting
Parks and Wildlife ranger Patrick Carmody is on the hunt for crocodiles which may have swum into the flooded outback town.
He planned to harpoon or shoot any crocodiles, freshwater and saltwater, he found.
Mr Carmody says several wallabies have also been found dead, although he believes many other animals were safe because they were earlier moved to higher ground.
"A few wallabies have got trapped, a few have been drowned, and a few have been shot," Mr Carmody said.