The monarch's decision comes as the Sunni-ruled kingdom tightens its grip on dissent.
The decision comes as the Sunni-ruled kingdom tightens its grip on dissent, with scores of largely Shiite activists sentenced to lengthy prison sentences.
Bahrain, a key US ally that neighbours Saudi Arabia, has been rocked by frequent protests since authorities cracked down on Shiite-led demonstrations demanding political reforms in 2011.
Military courts in Bahrain were previously limited to trying members of the armed forces or other branches of the security services and could only try civilians under a state of emergency.
Under the new amendment, the courts have the power to try any civilian accused of threatening the security of the state.
The official BNA news agency said on Monday that King Hamad had approved the amendment to Article 105(b) of Bahrain's constitution.
The move coincided with a decision by the kingdom's top court to reduce the jail sentence of the leader of main Shiite opposition faction, Sheikh Ali Salman, who had been convicted of inciting hatred and insulting the state.
Salman's sentence was cut from nine years to four years in prison.
The constitutional amendment was approved weeks ago by both the 40-seat upper house of parliament, appointed by the king, and the 40-seat elected lower house.
Hamad had declared a temporary three-month state of emergency after the crackdown on protests in 2011, allowing special courts to try civilians connected with a wave of protests.
News of the latest amendment sparked harsh criticism among rights groups.
Amnesty International called the amendment a "disastrous move towards patently unfair" trials of civilians, warning that it could be used to try activists on "trumped-up charges".
Authorities have justified the move as necessary to fight what they say are Iran-linked anti-government cells that have targeted the state.
The kingdom has tightened its grip on dissent over the past six years, stripping dissidents of citizenship and banning foreign media.
Bahrain, home to the US Navy's Fifth Fleet, accuses the opposition of working with predominantly Shiite Iran to incite unrest in the kingdom. Tehran has consistently denied involvement.
The kingdom last year ordered the dissolution of Shiite opposition group Al-Wefaq, headed by Sheikh Salman, over links to "terrorism".
Al-Wefaq had been the largest bloc in Bahrain's elected lower house of parliament.