The new ban will be introduced through proposed amendments to the Tobacco and Other Smoking Products Act 1998.
Retailers will have until mid 2011 to remove displays, Acting Premier Paul Lucas said on Thursday.
Banning the point-of-sale displays for smoking and tobacco products was recommended by a parliamentary report into chronic diseases in January 2010.
Mr Lucas said the measures will be introduced to complement the federal government's announcement on Thursday to introduce plain packaging for cigarettes and increase the tax on cigarettes by 25 per cent.
Mr Lucas also warned big tobacco companies that the state government will also back the federal government if the issue came to the courts.
"I want to make the message to big tobacco very clear. If they want to use their billions (of dollars) to pull on a court challenge we will stand united with the federal government on this," Mr Lucas said.
"If there is any doubt about federal constitutional power, Queensland will offer full legislative support to counter any legislative challenges by big tobacco."
Mr Lucas said the billions of dollars smokers cost Queensland each year would far outweigh the cost of any court action.
"Smoking kills an estimated 3400 Queenslanders each year, with more than 30,450 people admitted to Queensland hospitals each year for smoking-related illnesses," he said.
"The total cost of smoking to Queensland society - including loss of productivity, premature death - is $6.3 billion per year.".
Heart Foundation CEO Cameron Prout welcomed the move, saying putting cigarettes out of sight will protect children from tobacco advertising and stop undermining the resolve of smokers to quit.
"Banning displays is an excellent public health initiative which will not only save lives, but also reduce the burden on the health system with less smokers presenting with cardiovascular disease and cancer," he said.
