At a news briefing, he said he would dissolve parliament later this week and was also delaying a planned but unpopular increase in sales tax.
Shinzo Abe was elected two years ago with an ambitious plan to revive the economy, but has struggled to do so.
Shinzo Abe's popularity has fallen but he is expected to win the election, which will take place in mid-December.
"I will dissolve the lower house on Friday Nov 21,2014 Shinzo Abe said.
Shinzo Abe's party, the Liberal Democrats, already have a majority in the lower house, but analysts said Mr Abe hoped to consolidate power over an opposition party which is in disarray.
Shinzo Abe also wants public support to continue to press ahead with "Abenomics", his ambitious plan to kick-start Japan's stagnant economic growth using heavy government spending and economic reforms
Japan's Prime Minister Shinzo Abe has dissolved parliament on Friday Nov 21,2014, paving the way for a snap election.
Lawmakers cheered 'banzai', or 'cheers' in Japanese, following the dissolution announcement
The dissolution of parliament was announced in the lower house by Speaker Bunmei Ibuki on Nov 21,2014 Friday morning.
Japan's legislature, known as the National Diet, comprises the upper House of Councillors and the lower House of Representatives.
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