The government of Papua New Guinea has declared a state of emergency in energy-rich Southern Highlands province, the prime minister said.
The prime minister says troops are heading for the province
Sir Michael Somare said troops were being deployed to restore law, order and good governance in the province.
Southern Highlands is key to a proposed gas pipeline linking PNG and the Australian state of Queensland.
Provincial Governor Hami Yawari condemned the move, threatening to block the gas project.
The prime minister told parliament that soldiers and police were on their way to the province, where a curfew had been imposed.
He said government officials would work to restore good governance, accusing the provincial government of corruption.
Development funds were "being squandered by individuals and political cronies of provincial politicians", the Australian Associated Press quoted him as saying.
Politicians from Southern Highlands supported the move in parliament, the Associated Press news agency reported, with the exception of Mr Yawari.
He threatened to withdraw support for the gas pipeline project and prevent landowners from agreeing to it.
"I want to tell the prime minister, unless you come back to parliament and withdraw the state of emergency, I'm officially announcing that there won't be any gas project," he told Radio Australia.
"Investors, don't put money on the gas project," he said.
The proposed project would pipe vast gas reserves from several fields in Southern Highlands to northern Queensland.
It would bring much needed revenue to PNG, whose government is struggling to address economic problems and rising crime.
In December 2004, a report by the Australian Strategic Policy Institute in Canberra stated that Papua New Guinea was facing social and economic ruin and could be overrun by criminals because of weak government and ineffective policing.