The declaration would allow Ethiopian security forces to crack down on demonstrations, ban some publications from distributing material "that could incite and sow discord" and establish a special court for people who break those rules.
Desalegn said he hopes his resignation will advance reforms at a time when "many lives have been lost, people have been displaced and property damaged, and there are efforts to harm investments".
Mulatu Gemechu, delegate secretary of the resistance Oromo Federalist Congress, said Ethiopia required a totally new political framework following quite a while of turmoil.
Ethiopia's Prime Minister quit on Thursday, saying he wanted to smooth the route to further political reforms The government is dominated by the EPRDF coalition led by ethnic Tigrayans.
The state of emergency is to be declared amidst increasing power struggle, especially between the OPDO and ANDM, to replace the outgoing Prime Minister.
Numerous prisoners took part in anti-government protests in 2015 and 2016 in the country's two most populous provinces, whose ethnic Oromo and Amharic communities complained that they are under-represented in the country's corridors of power. He remains in office until parliament and the EPRDF coalition accept his resignation.
The unrest has raised concern over the stability of Ethiopia, east Africa's largest economy. But rights groups have often criticised the government for clamping down on political opponents and the media.
Under a previous state of emergency, declared in October 2016 and lasting 10 months, thousands of Ethiopians were arrested by the military. In a bid to ease tensions, the government last month began issuing a string of pardons and prisoner releases, after Hailemariam said jailed "politicians" would be released "to improve the national consensus and widen the democratic platform".