Prime Minister Prayut Chan-o-cha has insisted he did not bow to pressure in making the decision to end prosecution of civilians in military courts.
Speaking at Government House, Gen Prayut said the issue was made using his own initiative and he had discussed the idea with his deputy, Prawit Wongsuwon, before he travelled to the G20 Summit in Hangzhou, China, and the Asean Summit in Vientiane of Laos last week.
The prime minister said he thought it was time to ease restrictions now society appears stable and anti-coup sentiment has died down.
He was speaking ahead of his planned trip to attend the 71st session of the UN General Assembly in New York between Sept 18-24.
Gen Prayut invoked Section 44 of the interim charter to end the Military Court's role in trying civilians in cases involving security, lese majeste and violation of the regime's orders. The order was announced in the Royal Gazette on Monday.
According to the order, any offence based on orders No.37 and No.38 in 2014, which would earlier have been tried in a military court, now come under the authority of the ordinary court of justice. They include lese majeste, security charges including weaponry and sedition, and violation of the NCPO's orders.
However, any offence that normally falls within the jurisdiction of the Military Court will still proceed there. The order will cover offences committed from the day it took effect, which was Monday.
Any case currently being tried at the Military Court will still proceed there.
The order also stipulates that military officers assigned to maintain order and thwart criminal activity deemed detrimental to the country's peace and economy will still have the authority to carry on with their duties.
The UN Human Rights Office for South-East Asia (OHCHR) on Tuesday day welcomed the government's decision to stop prosecuting civilian cases in military courts, ending a practice introduced after the military coup in 2014.
The High Commissioner for Human Rights had repeatedly expressed his concerns over the use of military courts to try civilians, and a number of countries had recommended ending the practice during Thailand's human rights review at the UPR in Geneva.
"We are encouraged by this decision as it is one of the key steps needed to restore democracy in Thailand, and will serve to strengthen the rule of law, good governance and human rights protection," said OHCHR's Acting Regional Representative, Laurent Meillan.
"However, as the order is only applicable to new cases, we urge the Thai government to implement it retroactively to ensure all civilian trials take place in civilian courts."
The UN Human Rights Office also called on the government to suspend the application of the military orders that give increased policing powers to military officials, and to drop all cases against individuals arrested and charged for exercising their fundamental rights of freedom of expression, opinion and assembly.
US embassy spokeswoman Melissa Sweeney said: "The NCPO order announcing the end of additional civilian prosecutions in military courts is a positive step towards ensuring that the government's practices are consistent with Thailand's international obligations.
"We encourage the government to take further actions to lift restrictions on civil liberties and allow all Thais to participate freely and openly in building consensus in order to achieve a stable, sustainable democratic future."
Foreign Minister Don Pramudwinai said Gen Prayut's decision to end prosecution of civilians in military courts is a positive development.
Mr Don echoed Gen Prayut's comment that the decision had nothing to do with international pressure, nor the criticism during Thailand's human rights review at the Universal Periodic Review (UPR) in Geneva earlier this year.
Mr Don also denied that the decision was linked to Gen Prayut's planned trip to attend the UN's General Assembly in New York.
Deputy Prime Minister Wissanu Krea-ngam said Tuesday the Military Court will still hear some 500 ongoing cases against civilians. There are 1,500 cases in the military courts, of which 1,000 cases have already finished and 500 cases remain, he added.
The cases that are being tried by the Military Court will go ahead because most of the trials have now made progress, Mr Wissanu said. The new order does not cover cases involving violence in the three southernmost provinces, he said.