"It has become necessary to declare a state of emergency as a situation has emerged where it has become difficult to control this unacceptable movement under current law," the office of Prime Minister Abiy Ahmed said in a statement posted on social media.
The statement did not make clear if the state of emergency applied nationwide or just to Amhara, which lies to the north of the capital Addis Ababa.
Abiy's government did not reply immediately to questions from AFP.
Clashes in Amhara between the national army and local fighters have escalated in recent weeks, prompting travel warnings from foreign governments and the cancellation of flights by the national carrier Ethiopian Airlines.
Tensions have been rising since April when the federal government announced it was dismantling regional forces including in Amhara, where nationalists felt the move would weaken Ethiopia's second most populous region.
On Thursday, local authorities in Amhara asked the federal government for assistance managing security as the situation had become "difficult to control" and was causing social and economic disruption in the region.
The government said the violence "endangered the constitutional order" and the decision to invoke a state of emergency was "unanimous."
Amhara's regional forces and local militias backed the national army in their two-year war against rebels from the neighboring region of Tigray.
That conflict was resolved with a peace deal in November 2022, but Amhara "special forces" and fighters from the Fano militia group continue to control Western Tigray, a fertile expanse claimed by both Tigray and Amhara.
The peace accord angered nationalist elements in Amhara and tensions escalated in April when Abiy announced the disbanding of regional forces.
The prime minister said integrating these fighters into the national army or regional police would bolster "unity" in multi-ethnic Ethiopia but the move sparked protests in Amhara.
Ethiopian army spokesman Getnet Adane told a press conference this week that fighters claiming to belong to Fano were responsible for the violence.
The U.K.'s Foreign Office has warned its citizens against traveling to certain parts of Amhara, citing "increased violence in these areas characterized by Fano taking control of these areas" and Lalibela Airport, referring to a tourist town famous for its UNESCO-listed 12th and 13th century rock-cut churches.
A Lalibela resident who spoke to AFP on the condition of anonymity also said the airport was under Fano's control and that clashes were continuing on the outskirts of town.
The Spanish Embassy in Addis Ababa on Tuesday also urged its nationals not to travel to Amhara, citing "instability."
Late Wednesday, Ethiopia's Deputy Prime Minister Demeke Mekonnen said that "the security problems that are seen in different areas of Amhara region are becoming worrisome."
"We are at a historical time where we should be mindful of the fact 'If you don't have peace you will lose everything'," he posted on Facebook.