Sánchez made the announcement at a press conference in Madrid on Friday, saying: "I have informed the King. I will dissolve Congress and call for elections for the 28th of April."
The announcement comes two days after his Socialist government suffered a defeat in Parliament after failing to get its 2019 budget passed.
Spain's electorate is also set to vote in a series of local and European elections in May.
A busy electoral year follows on from December 2018 regional elections in the southern province of Andalucia, in which the far-right Vox party unexpectedly won 12 seats.
The results broke new political ground in Spain, marking the first time that a far-right party recorded such electoral success since the death of dictator Francisco Franco in 1975.
Vox then negotiated to form a right-wing coalition, which now runs Andalucia's regional government. Vox's success in Andalucia has sparked fears that the far-right could extend its influence to the national level.
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