In a surprise statement outside No.10 Downing Street, Mrs May said that a general election would help settle a number of issues and give Britain more certainty, stability and strong leadership ahead of the EU referendum.
It would help bring the country together, she said.
Because the UK now has five year fixed term parliaments introduced by former PM David Cameron, Mrs May will need to get the approval of MPs and a motion will be put to the House of Commons tomorrow. If the vote confirms her request, the general election will be held on Thursday 8 June throughout the UK.
Until recently senior ministers have rejected suggestions of an early election but Mrs May said today: "I have concluded the only way to guarantee certainty and security for years ahead is to hold this election."
"...so we need a general election and we need one now. We have at this moment a one off chance to get this done."
If MPs accept the proposal by the Prime Minister, parliament will be dispersed soon and the country will go to the polls. If the government follows normal protocol the general election could be followed by a Budget soon after although with the most recent Budget taking place in March this is not certain.
The FTSE 100 is down by 1.23% as of 11.30 am today but the pound recovered slightly after earlier falls.