Thai Prime Minister Yingluck Shinawatra says she will dissolve the lower house of Parliament and call elections in an attempt to calm the country's deepening political crisis.
Yingluck's announcement came as thousands of anti-government protesters began marching through Bangkok in a "final showdown" against her government.
"After listening to opinions from all sides, I have decided to request a royal decree to dissolve Parliament," Yingluck said in a televised statement. "There will be new elections according to the democratic system."
She did not immediately set a date and it was unclear whether the move would ease the country's political standoff, which deepened Sunday after the main opposition party resigned from the legislature en masse.
Protest leader Suthep Thaugsuban called on supporters to stay peaceful, but many fear the day could end violently when demonstrators converge from nine locations on Yingluck's office at Government House.
More than 60 Thai and international schools in Bangkok have closed as a precaution.
Thailand has been plagued by political turmoil since the army toppled Prime Minister Yingluck Shinawatra's brother Thaksin in a 2006 coup. In broad terms, the conflict pits the Thai elite and the educated middle-class against Thaksin's power base in the countryside, which benefited from populist policies designed to win over the rural poor.
"We will rise up. We will walk on every street in the country. We will not be going home again," said Suthep, whose supporters have occupied the Finance Ministry and part of a vast government complex for more than a week. "The people who will be going home empty-handed are those in the Thaksin regime."
Since the latest unrest began last month, at least five people have been killed and at least 289 injured. Violence ended suddenly last week as both sides paused to celebrate the birthday of the nation's revered king, who turned 86 Thursday.