"The cabinet has decided to take all measures necessary to confront these risks and put an end to them," an official said in a televised statement.
The statement termed the continued rallies "a national security threat".
Three top Muslim Brotherhood leaders have also been referred to court on charges of inciting violence.
The movement's supporters have been staging sit-ins for several weeks since President Morsi was removed on 3 July, after just one year in office.
They have defied previous threats of removal from their sit-in protests, despite deadly clashes with security forces. (+ video) » | Wednesday, July 31, 2013
BBC: Morsi meeting: EU chief Catherine Ashton speaks to BBC (+ video) » | Tuesday, July 30, 2013
