Before the announcement, which is likely to set off unrest, India had flooded the disputed region with thousands of extra troops and cut off internet service.
Many people in the disputed region were fearful about stepping outside and waited in their homes for news about what was going to happen next.
The disputed region of Kashmir was thrown into further turmoil in the early hours of Monday as regional leaders said they feared being arrested and Indian officials imposed restrictions in the city of Srinagar and suspended mobile data services in parts of the state.
Thousands of Indian tourists, pilgrims and workers began leaving the disputed region of Kashmir after a local government alert over possible militant attacks, and India said it killed at least five militants who were trying to attack its forces.
India's top court will hear arguments every day in an effort to resolve a decades-old dispute over what should be built on the ruins of a 16th-century mosque, Chief Justice Ranjan Gogoi said on Friday.
Iran's Foreign Minister Javad Zarif will hold talks with his counterpart in the Indian capital on Tuesday after New Delhi stopped purchases of Iranian oil this month in the wake of renewed U.S. sanctions.
Islamic State (IS) claimed for the first time that it has established a "province" in India, after a clash between militants and security forces in the contested Kashmir region killed a militant with alleged ties to the group.
Dozens of protesters gathered outside India's Supreme Court on Tuesday, a day after a panel of judges dismissed a sexual harassment complaint against the chief justice, carrying placards demanding a new and impartial investigation.
Police responded to protests with force in the mountainous Kashmir region, where the government has been trying to crack down on separatists.
Hundreds of thousands of people were left homeless after a cyclone packing winds of about 200 km per hour slammed into eastern India, ripping out tin roofs and destroying power and telecom lines, officials said on Sunday.