The decrees were signed on Sunday. The state of emergency will last until September 17.
An emergency committee is also to be set up to deal with the aftermath of Georgia's August 8 attack on the de facto independent republic, Kokoity told Russia's Vesti-24 television. The speaker of the separatist parliament, Znaur Gassiyev, has been appointed its head.
Boris Chochiev has been named as acting prime minister. Chochiev, a former South Ossetian vice-premier, will replace Yuri Morozov. The reasons for Morozov's dismissal were not specified.
Georgia launched a major offensive to seize control of South Ossetia on August 8, prompting Russia to send several hundred tanks and thousands of troops into the region.
Russia says at least 1,600 civilians were killed in the Georgian attack on Tskhinvali, the capital of South Ossetia. Moscow has also warned of a humanitarian crisis in the area. Some 12,000 refugees are currently being housed at camp across the border in the Russian republic of North Ossetia. Up to half of the republic's population of some 70,000 is believed to have fled the fighting.
At a government session on Sunday, Kokoity heavily criticized his criticized his Cabinet over their management of the distribution of humanitarian aid to the residents of South Ossetia.
"I'm completely dissatisfied with the work of the government," Kokoity said.