Mr Albanese has emerged from the Lodge to inform Governor-General Sam Mostyn of his intention to call the much-anticipated poll.
He will later announce the date Australians will head to the polls, which is expected to be May 3.
An election must be held by May 17 at the latest.
In Labor's red corner, Mr Albanese will vie to be the first prime minister since John Howard to win back-to-back elections.
No party has been booted from government after one term for nearly a century, but Opposition Leader Peter Dutton is hoping for a shift.
Mr Dutton has led the coalition through three years of opposition to be within striking distance of the government.
While the election was expected to be held earlier in April, the arrival of Tropical Cyclone Alfred in Queensland and northern NSW meant the prime minister held off making an election call due to the natural disaster.
The delayed election call also led to the government handing down a budget, which unveiled tax cuts for all workers from July 2026.
Mr Dutton used his budget reply on Thursday to roll out a halving of the fuel excise for one year as a cost-of-living measure.
Announcing the election on Friday has allowed the government to steal the spotlight from the opposition's budget reply.
Polls have shown a tight contest is on the cards, with a hung parliament looming as a likely outcome.
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