Portugal's president has announced plans to dissolve parliament and call a snap election on 30 January, BBC reports.
Marcelo Rebelo de Sousa cited the national assembly's rejection of the government's draft budget for 2022 - the first such occurrence in decades.
He said the budget would be crucial as Portugal tries to exit the pandemic and an "economic and social crisis".
The early election comes after a period of relative political stability under Prime Minister António Costa.
He has hung on to power for six years despite his Socialist Party lacking a majority in parliament.
After the 2015 election, the Socialists signed agreements with far-left parties to assure the passage of key legislation.
But there were no written deals after the 2019 election so the government has relied on case-by-case negotiations.
That increasingly fraught arrangement came to an end with a 27 October vote rejecting next year's budget.
The Communist Party joined the larger Left Bloc in voting against the bill - rather than abstaining as in the previous two years - even though the president warned beforehand that he would dissolve parliament if it was rejected.
That warning was seen as an attempt to chivvy the parties into trying to reach a deal, right up until the vote.