The move comes after the United Arab Emirates-backed Shabwani Elite forces withdrew from the area.
Yemeni officials say government forces have reclaimed more southern areas from separatists backed by the United Arab Emirates in clashes this week that killed at least 48 on both sides.
The officials said Tuesday that government forces took back several districts and towns in Abyan province, followed by a declaration of a cease-fire, in response to a call by the Saudi-led coalition.
The officials spoke on condition of anonymity to discuss the fighting with reporters.
The government forces and the UAE-backed separatists are allies in the Saudi-led coalition that has been battling Iran-aligned Houthi rebels since 2015.
But in recent weeks, internal rivalry has boiled over, leading to clashes across the south.
Pro-Yemeni government forces seized the port and coastal area of Balhaf town in Shabwah province Monday, according to a military source.
The area also contains the Balhaf liquefied natural gas facility which the UAE forces used as a military base.
Speaking on condition of anonymity, a military source said while some of the Shabwani Elite forces had withdrawn, the majority declared their loyalty to government forces after minor clashes.
The withdrawal took place with the supervision of Saudi and Emirati officers as part of a deal on the pullback of UAE troops and other loyalist forces.
For its part, the UAE-backed Southern Transitional Council (STC) confirmed the commitment of the Shabwani Elite forces to a ceasefire and de-escalation in Shabwa province.
STC forces recently suffered a setback after failing to storm the city of Ataq, the provincial capital of Shabwah.
Saudi Arabia and the UAE have reiterated their cooperation in the war against Houthi rebels in Yemen and called for dialogue to address the causes of violence in the southern city of Aden.
The UAE has been the focus of anger in Yemen after UAE-backed separatist forces took control of all government military camps and the presidential palace in Aden after clashes with government forces.
The violence has triggered calls inside the Yemeni government for expelling the UAE from the Saudi-led coalition fighting Houthi rebels since 2015.
Saudi Arabia and the UAE called for a speedy dialogue in the Saudi city of Jeddah to "address the causes and repercussions of events taking place in some southern provinces".
Yemen plunged into a civil war in 2014 when Iran-backed Houthi rebels overran much of the country, including the capital Sanaa.
The ongoing violence has devastated Yemen’s basic infrastructure, prompting the UN to describe the situation as "one of the worst humanitarian disasters of modern times”.