After laying out the Barisan Nasional coalition´s recent achievements in a speech on state television, Najib announced the legislature would be dissolved Saturday to pave the way for the hotly-anticipated poll.
“We have delivered and we will continue to deliver,” he said, appealing to the country´s 14.9 million voters.
Following the dissolution, the election commission will announce in the coming days the date for the polls, which are expected early May.
The coalition has been in power since independence from Britain in 1957 but its support has been dropping in recent years. A scandal surrounding sovereign wealth fund 1MDB that captured global headlines has worsened its problems.
Billions of dollars were allegedly looted from the fund in an audacious campaign of fraud and money-laundering which is being investigated in several countries, and it is claimed that large sums ended up the personal bank accounts of Najib.
The leader and the fund deny any wrongdoing.
Najib´s United Malays National Organisation (UMNO), the main coalition party, has clung on to power by pushing policies that favour the Muslim Malay majority. It was already struggling after losing the popular vote in the 2013 election for the first time in history.
Voters had become increasingly disillusioned over recurring graft scandals, divisive racial politics in the country which is home to substantial ethnic Chinese and Indian minorities, and the rising cost of living.
Despite the problems, the 64-year-leader is tipped to win a third term at the head of the coalition after weathering the 1MDB scandal by sacking critics in government and launching a crackdown. He has also been helped by a robust domestic economy.
His government fuelled further criticism last week by pushing through parliament a controversial redrawing of the electoral map which critics say will tilt the poll in Najib´s favour. MPs also passed a law banning “fake news” that could see offenders jailed, which some fear could be used to crack down on dissent.
Mahathir upends race
Victory is, however, less certain due to the comeback of Mahathir, 92, who has turned on his former protege Najib over the 1MDB scandal.
In a volte-face, he was named the prime ministerial candidate in the opposition coalition Pact of Hope, which is filled with parties he crushed during his 22 years in power.
Mahathir has long championed the Malay cause and the opposition hopes he can win over Muslim voters disillusioned with BN, to bolster their support base of urban voters and ethnic minorities, particularly the Chinese.
But his political party Bersatu suffered a blow Thursday when authorities ordered it to temporarily disband due to a failure to submit paperwork. Mahathir has disputed the legality of the move and said the party will not halt its activities.
After Najib announced the dissolution of parliament, Mahathir — himself accused of being an authoritarian ruler — raised concerns the move against Bersatu meant Malaysia was losing “the democratic right to choose our own leaders through elections”.
The opposition are facing other major challenges. They have suffered from the absence of charismatic leader Anwar Ibrahim, who is in jail, and the loss of support from the Pan-Malaysian Islamic Party, an influential group with huge appeal among rural voters.
While 1MDB has captured global headlines, rising living costs and the economy are the key issues in the Malay heartland in the country of 32 million.
The government lost a two-thirds parliamentary majority, needed to amend the constitution, in the 222-seat parliament at the 2008 election and is hoping to win it back.
“Najib is likely to win again,” Oh Ei Sun, from Malaysian think-tank the Pacific Research Center, told AFP.
“Mahathir is unlikely to make major inroads with rural voters.”