Fiji strongman Voreqe Bainimarama relinquished his military command on Wednesday in a move hailed by Australia and New Zealand as pivotal for the coup-plagued Pacific nation's return to democracy.

Bainimarama's resignation means he will contest elections scheduled for September as a civilian, not as the leader of an armed force that has been involved in four coups since 1987.

The 59-year-old, who used the army to seize power in late 2006, said it was difficult to end a military career spanning almost four decades.

But he said Fiji's new Constitution, adopted last year, barred soldiers from political life, meaning he had to stand down in order to run in this year's long-awaited polls.

"I am intensely conscious of the solemn duty that rests with me to continue the revolution that we began together seven years ago – to create a new Fiji, a better Fiji for ourselves and for future generations," he said.

Australia and New Zealand, which led international efforts to isolate Fiji diplomatically when Bainimarama tore up the constitution and limited basic freedoms, both welcomed his actions.

"Separating the government and the military is an important step towards holding credible elections … today's [Wednesday's] announcement is an important milestone on that road," New Zealand Foreign Minister Murray McCully said.

His Australian counterpart Julie Bishop said Bainimarama's resignation was the "latest in a series of positive developments in Fiji's election preparations and its return to parliamentary democracy".

'Normalising' relations with Fiji

She said Canberra remained committed to "normalising" relations with Fiji, including defence ties that were cut in the wake of Bainimarama's coup.

However, Amnesty International said the Fiji regime could not pay lip service to democratic ideals while it appeared the military was "rewarding officers who perpetrate serious human rights violations with impunity".

Grant Bayldon, Amnesty's executive director in New Zealand, said Bainimarama's departure came 12 months to the day after a video was released apparently showing two escaped prisoners being tortured and sexually assaulted by officials.

Bayldon said there had never been any credible investigation into the incident, despite official assurances, and there had been other allegations of the military being involved in violent crimes.

"Despite Fiji's government professing a commitment to freedoms in the lead up to elections, the fact that it is willing to overlook torture and other ill treatment by security forces certainly suggests otherwise," he said.

Bainimarama will remain as interim prime minister until the election. He appears to be in a strong position, with an opinion poll in the pro-government Fiji Sun this week putting his support at 79%.

He appointed career soldier Mosese Tikoitoga to succeed him as commander of the Republic of Fiji Military Forces. – AFP