The territory's leader or chief executive is chosen by an 800-member election committee appointed by Beijing.
China has ruled voters in Hong Kong would not directly elect their leader before 2017 and the full legislature before 2020.
However democracy leaders in the territory say they want to see universal suffrage by 2012.
Al Jazeera's Rob McBride, reporting from Hong Kong, said there remain nagging doubts in the pro-democracy camp that Beijing will not allow full democracy at any time in the future.
"Having carried out their threat and resigned, the question is how will pro-Beijing groups in Hong Kong react," he said.
One pro-Beijing party, the Liberal Party, has already said it will boycott the by-elections and another, the Democratic Alliance for the Betterment of Hong Kong, is expected to follow suit.
Earlier the Chinese government issued a statement labelling the "referendum" plan a blatant challenge to its authority.
It said the plan was not in line with the Basic Law, Hong Kong's mini-constitution which forms the foundation for Hong Kong's separate legal system.
However Tanya Chan, a member of the Civic Party and one of the five lawmakers who resigned, dismissed claims that proponents of the resignations were calling for an "uprising."
"It's not a bloody uprising," she told the AFP news agency. "It's a rational and peaceful pursuit for real democracy."