The military will continue its "national and historic responsibility, taking into account that the state of emergency has ended, in accordance with the constitutional declaration and with the law," it said.
It said it would continue in that role until it hands over power, as it has promised it would to an elected president by the end of June. A runoff between the two frontrunners from the first round of the election is to be held on June 16-17.
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Egypt has been under a state of emergency continuously since president Anwar Sadat's assassination in 1981, allowing authorities to detain people without charge and try them in emergency security courts.
Parliament renewed the emergency law for two years in May 2010 when now ousted president Hosni Mubarak was still in power, but limited its application to terrorism and drug crimes.
The Supreme Council of the Armed Forces (SCAF), which took charge after Mubarak's overthrow in February 2011, at first extended the law to include strikes but then said it would apply only to "thuggery."
A constitutional declaration ratified in a referendum in March last year gave the military the responsibility to "protect" the country but said only parliament had the right to proclaim a state of emergency, at the executive's request.
The military had suspended the constitution after Mubarak's overthrow.
Essam Erian, the deputy leader of the Islamist Freedom and Justice Party, which has the most seats in parliament, told AFP the military's statement indicated it would not ask parliament to extend the law.
The party's leader and presidential candidate Mohammed Mursi has said the law will not be renewed.
Speaking in Washington, US State Department spokesman Mark Toner said he understood the scrapping of emergency law takes effect at midnight.
"Certainly it's something that we've repeatedly encouraged them (SCAF) to do and it's certainly in keeping with the timeline that the SCAF has set out for this democratic transition. So it would be another step in that direction."
Ending the state of emergency was a key demand of protesters who toppled Mubarak in an 18-day popular uprising in January and February last year.
Thousands of Egyptians had been jailed under the law over the previous decades. Many have been released since the military took power.
But the ruling generals have themselves been criticised for trying thousands in military courts, which resemble the state security emergency tribunals in the limited rights afforded to defendants, human rights groups say.
"This is historic because the state of emergency was one of the Mubarak police state's tools," said Heba Morayef, a Cairo-based researcher for Human Rights Watch.
"It is a reflection of the fact that the age when the interior ministry was above the law and had unlimited power is over," she said.
"Unfortunately, this will not end most serious abuses that we saw over the last year and a half, because those were committed by the military and legitimised by military courts," she added.
