"Later today, I will offer to her majesty the Queen the resignations of the ministers and deputy ministers of the (Labour Party) PvdA," premier Jan Peter Balkenende told journalists in The Hague.
He said he would also "make available" the portfolios of the remaining cabinet ministers of his own Christian Democratic Appeal, the majority coalition partner, as well as the smaller Christian Union.
Balkenende made the announcement after more than 16 hours of crunch talks failed to save the centre-left coalition he has led since February 2007.
Parliamentary elections, scheduled for March next year, will now have to be brought forward with polls predicting a dip for the CDA from 41 to 34 of the 150 seats and parliament, and for the PvdA from 33 to 20.
"New elections will be held," deputy defence minister and CDA member Jack de Vries told reporters after Saturday's briefing.
In the latest in a string of coalition rows, vice-premier Wouter Bos invoked the ire of his cabinet colleagues this week by stating that his PvdA would not support extending the Dutch deployment in Afghanistan beyond 2010.
Balkenende insisted that the matter be thrashed out in cabinet, where it belonged, and the Christian Union (CU) chided the leftist leader for speaking out of turn.
The public spat resulted in a snap parliamentary debate Thursday, during which Bos was accused of using the issue for political gain as polls show his party lagging in the run-up to March 3 municipal elections.
The deployment of Dutch troops in Afghanistan was an unpopular move with voters from the outset.
"As the leader of the cabinet, I came to the conclusion that there is no fruitful path for the CDA, PvdA and Christian Union to take into the future," Balkenende said Saturday -- lamenting a break in mutual trust.
"For days we have seen that unity has been affected by ... statements that clash with recent cabinet decisions. These statements place a political mortgage on collegial deliberation."
NATO head Anders Fogh Rasmussen had asked the Netherlands this month to take on a new training role and remain in Afghanistan until August 2011, a year later than originally planned.
The request had required unanimous cabinet approval. De Vries said the future of the mission "depends on what the new government will decide".
Bos, who sad said he hoped for new elections before the summer, said there was broad support in society and parliament for his party's stance on Afghanistan.