Mohamed Adde Muse said a committee would decide how best to implement Sharia to replace the current Western-based system of civil laws.
Correspondents say the move follows intense pressure from local Muslim and clan leaders.
Puntland has been far more stable than southern Somalia after running its own affairs since 1998.
Much of southern Somalia is now controlled by the Islamist Union of Islamic Courts (UIC).
Earlier this month, Puntland denied reports its forces had clashed with Islamist militias near the border.
Some Puntland leaders had threatened to join the UIC, correspondents say.
John Prendergast, a senior adviser with the International Crisis Group, think-tank said the decree was intended to avoid conflict with the UIC.
"Puntland authorities are trying to pre-empt the UIC's agenda before the UIC makes a major play to overtake the government there," he said.
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