Italian President Sergio Mattarella dissolved the Italian parliament, paving the way for early elections, state broadcaster RAI reported.
Matarella said the election must be held within 70 days, leaving the government to set the exact date, which is likely to be late September.
RAI announced that the elections will be held on September 25.
"The period we are going through does not allow for any pause in the (government) action needed to combat the economic and social crisis and rising inflation," the president said in a brief address from his palace in Rome.
Dragi, who led the broad coalition for nearly 18 months, resigned earlier today and has been asked to remain in office.
A bloc of conservative parties, led by the far-right Brothers of Italy party, looks set to win a clear majority in the next election, a public opinion poll showed this Sunday.
Draghi's coalition fell apart on Wednesday when three of his main partners rejected a confidence vote he had called to try to end divisions and rebuild their fragile alliance.
He sought to reassert his authority as the parties began to pull in different directions ahead of the legislature's planned end in the first half of next year.
The political crisis has restored months of stability in Italy, during which Draghi helped shape Europe's tough response to Russia's invasion of Ukraine and strengthened the country's position in financial markets.
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