Egyptian army tanks surrounded the Port Said Security Directorate after police withdrew from the restive canal city on Friday morning.
The move came following days of sporadic clashes between anti-government protesters and police.
Late Friday afternoon, army spokesman Ahmed Ali announced that Egyptian military personnel currently deployed in Port Said would protect the security directorate but would not perform police duties.
Ali also said that Port Said residents had begun to form 'popular committees' to clean up the city in the wake of the clashes and provide security in conjunction with the armed forces.
"We extend our thanks to the people of Port Said for cooperating with the Second Army and for their efforts to secure and stabilise the city," Ali stated.
According to Ahram Online's Simon Hanna, reporting from Port Said, policemen on Friday had vanished entirely from the city's streets.
Military police are currently directing traffic alongside civilians, Hanna said.
Earlier on Friday, Brigadier-General Mohamed Wassefy, commander of Egypt's Second Army, told crowds assembled outside the security directorate – including relatives of recently slain protesters – that police had withdrawn from the building. He went on to ask local residents to help the army secure and clean up the area.
Ahram Online reporter in Port Said, Osman El-Sharnoubi, said that residents were generally happy that the army had taken the place of police. Some Port Said activists, however, voiced concern over what might happen on Saturday following a contentious court ruling in the Port Said stadium disaster trial.
Soon after police withdrew from Port Said, hundreds of residents began flocking to the city's Miriam Mosque for the funerals of Karim Atout and Ahmed Galal, two protesters killed in recent clashes.