The federal government cited the provincial administration's alleged failure to tackle Islamist militancy in the province, which borders Afghanistan, as the reason for imposing the emergency.
Following the move, internet disruptions were reported in parts of Peshawar, Dawn News reported.
The decision is likely to escalate tensions between Khan's PTI and the federal government. The standoff has been building for days, with PTI supporters gathering in the province ahead of a planned march to Islamabad to demand Khan's release.
Hundreds of PTI supporters, including Khan's sisters, have reportedly been arrested ahead of the planned march.
Sources in the telecommunications sector told Dawn News that mobile network and data services had been slowed or suspended in selected areas of some cities. However, no province-wide shutdown of mobile data or internet services had been announced.
The federal government has also authorised the deployment of Pakistan Army troops and assets in Khyber Pakhtunkhwa to assist civilian authorities, the newspaper reported.
According to reports, the decision to invoke emergency provisions in the province was taken at a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif.
Defending the move, Information Minister Attaullah Tarar on Sunday accused the PTI-led provincial government of maintaining links with terrorist groups.
“PTI government in KP is hand in glove with terrorists and has an unholy alliance with terrorists,” Tarar was quoted as saying by Dawn News during a press conference.
He further alleged that terrorists had a significant say in the administration of districts, citing reports from the Intelligence Bureau and law enforcement agencies (LEAs).
The authorisation for the deployment of army personnel and assets is part of the federal government's response to the security situation in the province.