President A P J Abdul Kalam, who is now in Russia, on Monday morning accepted the Union Cabinet's recommendation to dissolve the Bihar assembly.
The Centre late on Sunday night had recommended the dissolution of the assembly in Bihar, where no party, or coalition, had the numbers to form government.
A decision was taken at a meeting of the Union Cabinet presided over by Prime Minister Manmohan Singh.
Addressing the media on Monday morning, Home Minister Shivraj Patil said the decision was taken after the Centre was informed about horse-trading efforts in the state. "Some politicians kept the Government of India informed about the things happening there," he said.
"It is now for the Election Commission to hold polls in Bihar," he added.
The Election Commission, meanwhile, said it is awaiting official communication from the government.
"We will wait for the official communication from the government on the issue," an EC source told PTI.
Asked as to when the polls could be held, sources said the commission had six months' time to hold elections.
Earlier, Patil, Cabinet Secretary B K Chaturvedi and Home Secretary V K Duggal left the prime minister's residence shortly before 0200 hours but did not make any comment on the Cabinet decision.
The home minister had sought a report from Bihar Governor Buta Singh, who was in the capital, in the wake of fresh political developments in the state.
Bihar came under President's Rule on March 7 after assembly elections gave a fractured verdict and no party or group was in a position to form a government.
While imposing President's rule, the Centre had kept the assembly under suspended animation.
The Bihar budget was later passed by Parliament.