The announcement came late Monday after Erdogan met Parliament Speaker Ismet Yilmaz in a four-hour meeting.
"Mr. President negotiated with Turkish Grand National Assembly Speaker Ismet Yilmaz and decided on the renewal of parliamentary elections," said the presidency statement. The decision has also been published in the official gazette, triggering the process of creating a caretaker government.
Erdogan is to meet Prime Minister Ahmet Davutoglu at 11 a.m. [0800GMT] Tuesday, the presidential sources said.
The announcement for an early election comes a day after Aug. 23 deadline to form a coalition government expired without agreement between the four parties represented in the parliament.
The council of ministers is now to resign and the president will appoint a prime minister to form a provisional council of ministers.
The caretaker government is supposed to be formed within five days of publication in the official gazette of the decision to hold renewed voting.
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