Gov. Gen. Michaelle Jean has approved Prime Minister Stephen Harper's request to suspend Parliament, agreeing to put the government on hold until the end of January.
Harper addressed the media at just before noon after about two-and-a-half hours of meetings at Rideau Hall.
"Following my advice, the Governor General has agreed to prorogue Parliament," Harper told reporters from the front steps of the building.
He said the decision reflects the will of Canadians.
"Last Friday I asked Canadians to give us their opinion on the parliamentary situation. That feedback has been overwhelming and very clear. They want Canada's government to continue to work on the agenda they voted for -- our plan to strengthen the economy."
Harper also said that when Parliament resumes, the first item on the agenda will be the presentation of the federal budget and he will spend his time working almost exclusively between now and then on the fiscal blueprint.
He opened the door to co-operating with the opposition parties on the budget, saying Canadians expect all parties "to get on with it."
"It's the opportunity to work in the next six weeks on these measures, and I invite all the opposition parties, especially those that have a responsibility to the whole of Canada, to work with us, to inform us of their detailed position and we will be there to listen," Harper said in French.
Harper was seeking a suspension of Parliament in order to avoid a confidence motion scheduled for Monday that would have likely toppled his government.
The Liberals and NDP have agreed to form a coalition, with the support of the Bloc Quebecois, and have signaled their intention to bring down the government over the fiscal update that was introduced last week and would have come before Commons for a vote on Monday.
They had hoped Jean would deny the prorogation request and let the confidence motion go ahead. If it did, and the government fell, Jean would have to decide whether to send Canadians to the polls for another election, or grant the coalition the chance to win the confidence of the House of Commons and possibly take over government.
Jean returned home early from a central European tour on Wednesday to deal with the political crisis that has gripped the nation.
The decision Thursday followed a rare nationally televised address by Harper on Wednesday night.
In the five-minute pre-taped broadcast Harper said the opposition plans to oust his government and seize power would cripple the country's economy.
Harper also signaled he would be willing to work with the opposition parties in order to deliver an economic plan that will help Canada navigate perilous economic times.
Liberal Leader Stephane Dion also took to the airwaves Wednesday, though only after a major delay that saw national networks filling time as they waited for the tape to arrive.
"Stephen Harper still refuses to propose measures to stimulate the Canadian economy," said Dion. "His mini-budget last week demonstrated that his priority is partisanship and settling ideological scores.
The NDP's Jack Layton said Wednesday that the Conservatives have been wasting time with partisan politics instead of dealing with the economy.
"Stephen Harper simply refused to act," he said, adding the Conservatives also attacked the rights of workers and women.
The opposition began to cobble together their coalition after the Tories proposed last week to cut public funding for political parties as a part of their fall economic update.
The update also lacked a sufficient stimulus package, the opposition has said.
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