The King of Tonga is voluntarily surrendering his powers.
In a statement, King George Tupou V says he agrees with the people's wish for a more representative, elected parliament.
He says the monarchy must be an instrument of change, and he will now take guidance from the prime minister in all matters of governance, except judicial powers.
The King says the appointment of judges, king's counsel, clemency and commuting prison sentences must be free of political interference.
King George says he will cede some Privy Council functions to cabinet, ahead of elections under a new system in 2010.
Radio New Zealand's Pacific issues correspondent says the statement effectively means the king will become a figurehead like the British monarch.
The king is being crowned on Friday.
The cost of the event is expected to be almost $10 million - the budget was $4 million.
New Zealand Prime Minister Helen Clark will attend. She says there is considerable hospitality involved and a coronation of a Monarch is a significant event in a nation's life.
Miss Clark says New Zealand has a close relationship with Tonga, with many Tongans living and being educated in this country.
She will meet the Tongan prime minister and other Pacific Island Forum leaders during the festivities.