In an address to the nation, Mr Tsipras said that he would shortly meet with the “president of the republic” and present his and his government’s resignation.
Tsipras has been under mounting pressure to call early elections because of rifts in his own Syriza party over a massive new bailout deal with Greece’s global creditors.
He faced a rebellion by Syriza party members, where some 43 MPs either opposed or abstained, denouncing the attached austerity conditions.
Under Greece’s complex constitutional laws, President Prokopis Pavlopoulos cannot immediately call an election if Tsipras resigns, but must first consult the other major parties to see if they could form a government – a near impossibility given the current parliamentary arithmetic.
Greece’s European creditors did not appear dismayed by Mr Tsipras’s move, which was widely expected.
The new Popular Unity leader – former Energy Minister Panagiotis Lafazanis, who was sacked by Tsipras earlier this year for refusing to back the government – said Tsipras betrayed the Greek people who had voted overwhelmingly in June not to accept a bailout package offered by the eurozone or the worldwide Monetary Fund.
This latest round of elections come as Syriza has splintered following the passage of Greece’s latest bailout package.
Outgoing Deputy Finance Minister Tryfon Alexiadis said only an election could stabilise Greece.
The Greek election amounts to a referendum on the 41-year-old Tsipras and his bailout deal. New elections are likely to be held on Sept 20, so the country faces at least a month of acute uncertainty.
Tsipras has been in office as the head of a coalition government made up largely of Syriza with a deal with the rightwing, anti-austerity party Independent Greeks (Anel).
Funds from Greece’s new three-year, 86 billion euro ($127 billion Cnd) bailout are being disbursed in batches following reviews of the country’s progress on implementing reforms.
“Under the rule of the caretaker government, which will lead Greece until the polling date, the implementation of the reforms approved by the Greek parliament will nearly inevitably be delayed”.
A first day of discussions between New Democracy leader Evangelos Meimarakis and other political figures on Friday will be followed by more deliberations today as the conservative politician insists that he can avert snap elections. “I feel the deep moral and political obligation to set before your judgment everything I have done, both right and wrong, the achievements and the omissions”.
Tsipras is betting he will win the new vote and form a government that, shorn of the rebels, can implement the reforms demanded by the bailout over the next three years.
He acknowledged on Thursday the bailout deal was not what his government had wanted.