An independent commission of inquiry will investigate allegations that Fiji's army commander had asked for plans to be drawn up to overthrow the Qarase government if his term was not renewed.
Three senior suspended military officers made the allegations against Commodore Bainimarama in a document leaked to the media last week.
Fiji's cabinet decided on an investigation by a commission of inquiry following a recommendation by the home affairs minister, Joketani Cokanasiga.
The prime minister, Laisenia Qarase, says the government has taken this course because it is the best way of ensuring that all allegations are given a full and fair hearing.
He says the allegations have a direct bearing on national security and stability.
Mr Qarase says it is in the interest of Fiji, its people and their welfare that this serious matter be resolved.
He says President Iloilo has agreed with the cabinet decision and will appoint the commission of inquiry under the laws governing such inquiries.
The commission will be headed by a suitably qualified person from abroad and will have two suitable local appointees.
They will have powers to summon witnesses to testify and will be required to present their report within three months.