The emergency order suspends parliament until August 1 and gives the prime minister's government broad authority to enact laws.
"Let me assure you, the civilian government will continue to function".
It will last until Aug 1 but could be lifted earlier if the rate of new infections slows, it added.
"Al-Sultan Abdullah is of the opinion that the spread of COVID-19 is at a critical stage and that there is a need to declare a proclamation of emergency", the palace said in a statement.
Also, during this period, Muhyiddin said Federal executive powers will cover all matters concerning state legislative powers, except for Islamic laws and Malay customs, native laws and customs in Sabah and Sarawak, religion, citizenship as well as language, as prescribed under Clause 6A Article 150 of the Federal Constitution.
Meanwhile, the prime minister said the necessary powers under the Emergency Ordinance would also be used to facilitate matters and overcome regulations that made it hard to deliver fast, efficient and effective public health services during the COVID-19 pandemic.
Under the stricter restrictions, all social events involved mass gathering are banned, residents only allowed to travel within a radius of 10 kilometers, and no dine-in for restaurants. Total coronavirus cases passed 138,000 on Monday, with 555 deaths. A election in the state of Sabah past year has been blamed for triggering a new wave of infections that spread nationwide.
Muhyiddin had previously requested for a state of emergency to be declared in October 2020 but the Yang di-Pertuan Agong had decided that it wasn't necessary.
"It's very clearly a political move from the Muhyiddin side to preempt political challenges from both his rivals in his ruling coalition as well as the opposition", he said.
The move should reduce, at least for now, some of the political uncertainty hovering over Muhyiddin since his unelected alliance came to power with a razor thin majority in March following the collapse of the previous coalition led by Malaysia's veteran leader Mahathir Mohamad. "This Independent committee will recommend to the King if the state of emergency can be ended earlier", he said.