Portuguese President Marcelo Rebelo de Sousa has dissolved parliament and set snap elections for March 10.
The move follows the shock resignation of Prime Minister António Costa this week after he became embroiled in a corruption scandal along with members of his government.
In a speech to nation on Thursday evening, Rebelo de Sousa said Costa would stay on as a caretaker prime minster.
Costa said on Tuesday that his conscience was clear, but the allegations were too serious for him to continue holding office.
The investigation centres on suspicion of illegal practices, like misuse of funds and influence peddling, in the awarding of lithium and "green" hydrogen deals.
Costa, a Socialist, was considered the favourite in the next regular parliamentary election, which was not expected until 2026.
It was only in January 2022 that Costa and his Socialist Party (PS) won an absolute majority in Lisbon's national parliament, the Assembleia da República. Prior to that, he had led left-wing minority governments since the end of 2015.
After the difficult years of the euro crisis, Costa was credited for the much-celebrated Portuguese economic "miracle." Since 2016, economic growth in the small country with a population of just 10.3 million has almost always been above the EU average.
The unemployment rate has fallen rapidly and recently stood at just over 6%. Costa's government in October hiked the monthly minimum wage from €505 ($540) to €820.
