The new penal code will be implemented after 90 days, Reuters reports.
The move comes three years after President Obiang promised to abolish the death penalty.
Mr Obiang’s son, Vice-President Teodoro Nguema Obiang Mangue, described the decision as “historical and memorable,” Reuters news agency reports.
The last execution in the country took place eight years ago.
Capital punishment remains legal in just over 30 African countries, but more than 20 of those have not carried out executions for at least 10 years, according to data provider Statista.