The small resource-rich Pacific nation, which is due to host the Asia-Pacific Economic Cooperation (APEC) forum in November, has long struggled with violence and lawlessness.
The latest outbreak of unrest comes amid ongoing reconstruction efforts following a devastating 7.5-magnitude earthquake that struck the island's interior in February this year.
Protestors took to the streets in Mendi, the capital of the Southern Highlands province, following a court ruling on Thursday that upheld the election of the regional governor William Powi, amid accusations of vote rigging, according to local media.
Chief Superintendent Joseph Tondop, the Southern Highlands provincial police commander, told CNN protesters burned an airplane and the local courthouse. Some of the rioters were carrying "small knives and rocks" Tendop said on the phone from Mendi.
"The township is very much tense ... there is some law and order right now as we speak," he said.
he government announced a nine-month state of emergency throughout the province on Friday.
"Put simply, I have had enough of this nonsense that has been manipulated by people who would call themselves leaders," Prime Minister Peter O'Neill said in a statement posted on his website.
"Police will investigate every agitator, and every person who was involved in the unrest," O'Neill said.
The move allows the central government to suspend the provincial government during the state of emergency and deploy troops and law enforcement to help quell the unrest.
The rioting is likely to further sow doubts about Papua New Guinea's ability to host Asia-Pacific Economic Cooperation (APEC) forum, which will many of the world's leaders converge on the country's capital, Port Moresby.
It will be the first time Papua New Guinea host the event, and some have voiced concerns that the country's infrastructure will not be up to the task, making it harder to work out logistics and security.
Prime Minister O'Neill contends his country is ready for the task and defended the decision to host the event amid domestic criticism about its cost.
Papua New Guinea has some of the world's highest rates of crime and violence, according to the World Bank, though the statistics differ from region to region.
The country's remote and rugged terrain has hampered efforts to connect the country and create a favorable investment climate.
