The move gives sweeping powers to security forces to arrest and detain suspects and comes amid a tense standoff between the Supreme Court and the government.
"All basic rights have been suspended. Security forces have sweeping powers to arrest and search," Member of Parliament, Eva Abdulla said.
Massive protests are being held across the country including repeated rounds of clashes between police and the opposition leaders. The protests erupted after President Gayoom refused to follow the Supreme Court's ruling to release the key political prisoners and reinstate the 12 MPs.
Last Thursday, the Supreme Court had ruled that all politicians opposed to President Gayoom, including Nasheed, should be released. It had further said that their trials were "politically influenced".
The high-profile prisoners also include self-exiled former President Mohamed Nasheed and former Vice President Ahmed Adeeb.
The government has so far refused to implement the order, saying it had concerns about releasing those who were convicted for "terrorism, graft, embezzlement and treason".
Nasheed, the country's first democratically elected leader, took office in 2008. He was ousted in a coup in February 2012.
The country has seen political unrest since he was sentenced to 13 years in jail in 2015 on terrorism charges. He was given political asylum in the UK in 2016.
India expresses concern over situation in Maldives:
The Indian Ministry of External Affairs, meanwhile, expressed concern over the crisis prevailing in Maldives.
"Prevailing political developments in Maldives and resultant law and order situation is a matter of concern for GoI. Indian nationals are advised to defer all non-essential travels to Male and other atolls until further notice," the ministry tweeted.
MEA further said, "Indian expatriates in Maldives are also alerted to the need for heightened security awareness, and urged to exercise due caution in public and avoid public gatherings."