Pinera signed a decree on Friday that set the date for the referendum on April 26, 2020, saying: “Once again, the citizens can decide with pen and paper which path our country should take.”
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The drafting of a new constitution was a key demand of demonstrators who have taken to the streets against the government since October.
The current constitution dates back to 1980 when the country was under the dictatorship of General Augusto Pinochet.
The demonstrators have also demanded better access to healthcare and education and a departure from the neo-liberal economic system.
During the protests, at least 26 people were killed in clashes with security forces and in looting.
During the plebiscite next April, voters will first have to decide whether they want a new constitution and who should draft it.
Later, the draft will be put to another vote in a referendum.
Even as Pinera signed the latest decree, anger continued to brew on the streets of the capital, Santiago, on Friday, with protesters clashing with police.
A fire also broke out at the famous Centro Arte Alameda, an iconic building in the capital which houses a cinema.
It was unclear whether the protesters set the fire and authorities have yet to identify the cause.
Protesters are also angry at Pinera after he claimed in a television interview that “many” videos on social media showing alleged police abuse were “fake news”, and that the unrest was being fomented by foreign governments.
Protests have occurred daily for more than two months with thousands injured in clashes with police who have fired pellet guns at protesters, leaving at least 300 people with severe eye injuries.
Some 2,210 police have been reported injured during the protests and 188 police stations along with 971 police vehicles have been damaged.
The Office of the United Nations High Commissioner for Human Rights recently released a report based on a three-week fact-finding mission to Chile concluding that police and army committed “serious human rights violations” against protesters.