The Prime Minister's office said Martin would pay a formal visit to the country's Governor General Adrienne Clarkson on Sunday afternoon, who then will formally dissolve the parliament.
An election will almost certainly take place on 28 June, as there must be a period of 36 days between an election call, and an actual vote and Canadian elections are traditionally held on Mondays.
Martin will seek a fourth consecutive term in office for his centrist Liberal Party and personal mandate for himself after taking over from former prime minister Jean Chretien late last year.
The prime minister is not constitutionally required to call an election until November 2005.
According to latest polls, the Liberals are on a razor's edge, with support pegged at or just below 40%, ahead of the reconstituted Conservative Party and left of centre New Democrats.
Canada's political rumour mill has been abuzz for days that Martin, a 65-year-old former businessman and finance minister, would choose this weekend to make the formal announcement.
Martin's face peered out of full page advertisements in Saturday's newspapers, comparing his credentials to those of opposition leader Stephen Harper.
Conventional wisdom dictates that his best chance of being returned with a majority is an early poll, especially since his Liberals have been in power for a decade, and are wary of voter fatigue.