Chief Minister Lim Guan Eng said the state government's decision is part of its land reformation and renewal policy.
"We want to give ownership of land back to the people," he said in a press conference in his office today.
"This decision will have significant impact on industrial and commercial sectors, especially in their ability to get financing," he explained.
He cited, as example, owners who have 40 or 50 years left in their individual leases can now have them renewed to 99 years, making financing readily available.
"For residential house owners, these houses will be theirs forever."
Lim expressed confidence that all eligible conversion applications, to be done by the Evaluation Department and Land Office, will be completed within the next four years.
Strata title holders who own apartments and flats would have to wait while the state government liaises with the federal authorities because strata titles come under the National Land Code.
He said forms for landowners to apply to have their status converted can be downloaded from the state government's website after tomorrow.
Lim, who is also DAP secretary-general, also said the Pakatan Rakyat (PR) is coming up with a set of standard operating procedures for uniformity in governance in the five states led by the coalition.
"We are having continued discussions on this matter," he said, adding that a committee has been formed to look into the formulation of the procedures.
He said this while acknowledging that the PR administrations in the five states under the coalition did not share a similar structure.
"The process is ongoing for the PR administration to be formalised and structured," he added.
On a report that PAS Youth wants to implement Islamic laws, including prohibition of gambling and liquor, and introduction of dress code for office workers in all PR states, Lim said the issue does not arise.
"We have already made it clear that we are going to be fair to everyone regardless of race, gender, religion or political background," he said.
"As far as we know Penang PAS has not made any request to us on this matter. It was never raised, never discussed. So the matter does not arise."