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Qatar's emir Sheikh Hamad bin Khalifa al-Thani is to transfer power in the small but economically powerful Gulf nation to his son Sheikh Tamim, the official QNA news agency reported on Monday.
"The royal palace announces that Qatar's emir, Sheikh Hamad bin Khalifa al-Thani, will address the Qatari people at 8:00 am (0500 GMT) on Tuesday," said a statement carried by the official QNA news agency.
An official said the emir will "announce the transfer of his powers to his son".
The palace statement declared Tuesday an official holiday.
Qatar-based satellite television channel Al-Jazeera said the emir met "with the royal family and prominent members of Qatari society. He has informed the meeting of his decision to hand power over to his crown prince."
Sheikh Hamad, who used Qatar's immense gas wealth to drive its modernisation and transform it into a major player on the world's diplomatic scene, came to power in a coup in which he overthrew his father Sheikh Khalifa in June 1995.
Al-Jazeera reported earlier that the emir's planned meeting with royals and prominent members of society "comes amid news about the intentions of the emir to transfer power to his heir apparent, Sheikh Tamim bin Hamad al-Thani".
A diplomat said that by stepping down of his free accord the 61-year-old emir would "score a first in the Arab world," where autocratic rulers held power uncontested for decades until the Arab Spring revolutions that toppled regimes in Tunisia, Egypt and Libya.
Crown Prince Sheikh Tamim, born in 1980, is the second son of the emir and his second wife Sheikha Mozah.
He is deputy commander of the armed forces and head of the National Olympic Committee, which is in charge of hosting the 2022 FIFA World Cup in Qatar.
Diplomats said that over the past three years the emir has increasingly handed over military and security responsibilities to Tamim, who like his father was educated at the British military academy Sandhurst.
"The emir is convinced that he should encourage the new generation. He plans to transfer power to the crown prince, Sheikh Tamim, and to carry out a ministerial reshuffle to bring a large number of young people into the cabinet," a Qatari official told AFP on condition of anonymity.
"The emir could take a step back, that is to say not retire completely but play a more honorary role, so that his son can better assume the responsibilities and become the man in charge," a French diplomat said.
A Qatari official said that in any case the emir "will continue to play an influential backstage role and keep an eye on Qatar's investments abroad."
The emir has developed Qatar into a political powerhouse and an economic giant with multi-billion investments scattered across the world.
The tiny Gulf peninsula holds the world's third largest gas reserves and produces roughly 77 million tonnes of liquefied natural gas per year, making it the world's largest supplier.
Analyst Neil Partrick, an expert on the Gulf, ruled out major changes in Qatar.
Sheikh Tamim has two wives and six children. Muslim tradition allows men to take up to four wives.
"Tamim already has responsibilities for sensitive foreign portfolios among other matters," said Partrick.
"For Qatari foreign policy, none of this seems likely to produce major change. The young heir apparent Tamim is unlikely to effect major changes without consulting his father."
Qatar took part in the armed intervention in Libya and actively supports rebel forces who are trying to topple the regime of Syrian President Bashar al-Assad.
It has major investments around the world, including in the French football club Paris Saint-Germain, in hotels, in a resort on the Italian island of Sardinia, as well as stakes in automobile company Volkswagen, energy giant Total and Britain's Barclays Bank.
The Gulf state also controls a powerful media empire through Al-Jazeera, the first pan-Arab satellite channel which has branched out into English, and earlier this year bought Current TV, a struggling US cable channel, in preparation for the launch of Al-Jazeera America.