The emergency, which suspended many civil liberties and gave draconian powers to the security forces, was imposed last year ahead of a major military campaign against Maoist rebels.
As if to underline security fears, hours before the midnight deadline a bomb exploded at a major shopping complex in the capital, Kathmandu, causing damage but injuring nobody.
Nepalese forces say they have inflicted heavy casualties on the rebels since the emergency began.
Nearly half of the more than 4,000 people killed in the six-year insurgency have died in the last nine months.
Critics at home and abroad have condemned the emergency's strict provisions - under which many civilians have been arbitrarily arrested, they say.
But Prime Minister Sher Bahadur Deuba has secured the support of many neighbouring and Western countries for his anti-Maoist strategy.
Uncertainty
The BBC's Sushil Sharma in Kathmandu says there is some uncertainty over whether the emergency might be re-imposed or not.
Prime Minister Deuba had earlier hinted that to ensure the credibility of the parliamentary elections, the emergency would not be in force during the polls.
However, a senior minister, Chiranjivi Wagle, told reporters on Wednesday that in the light of the security situation, a final decision would be taken next week.
Our correspondent says a number of recent rebel attacks on government and civilian targets across the country could be used by Kathmandu to justify extending the emergency.
High-security polls
The rebels have already vowed to disrupt the polls and warned people not to take part.
Security has been high on the government's electoral agenda as a result.
Junior Interior Minister DR Kandel told the Reuters news agency that voting would be held in six phases to help government forces ensure security across Nepal's five administrative areas.
"The whole process will take two-and-a-half months," he said. "We will have security in each of the five regions.
"It will take time to move the forces in the remote parts."