Razak said the decision to replace the Sedition Act 1948 was made to find a mechanism to determine the best balance between ensuring every citizen's freedom of expression, and the need to handle the complex nature of the country's multi-racial and multi-religious society.
He said the act represented a "bygone era", and would be replaced by a "National Harmony Act" as part of a drive to allow greater freedoms in the country.
"With this new Act, we would be better equipped to manage our national fault lines. It will also help to strengthen national cohesion by protecting national unity and nurturing religious harmony," Najib said.
"The fact is that the vibrant efforts to colour Malaysia's political canvas has just begun," said Najib, adding that many other changes were being prepared in efforts to shape a politically mature society in the country.
Malaysian authorities had justified the use of the legislation as vital to curbing comments or actions that could stoke racial conflict in the multicultural nation.
There has been mounting pressure on Najib by rights groups and the opposition to remove laws which is long-known for authoritarian rule.
Najib also announced that recent amendments to laws as well as new laws relating civil liberties would be implemented immediately.
Najib, who came to power in 2009, had last year announced the repealing of several laws, including the Internal Security Act (ISA) 1960 and three Emergency
Najib's coalition, which has led Malaysia since independence in 1957, suffered its worst electoral performance ever in 2008. It now has slightly less than a two-thirds majority in Parliament and is working hard to stage a comeback in the forthcoming elections.
