The surprise move by the Islamist Mohammed Morsi will almost certainly lead to a clash with the powerful generals who formally handed power to him on June 30 after spending 16 months at the nation's helm following the ouster of Hosni Mubarak in a popular uprising.
The decree by Morsi, a longtime Muslim Brotherhood member, also called for new parliamentary elections to be held within 60 days of the adoption of a new constitution for the country, which is not expected before late this year.
Last month, the then-ruling military generals dissolved the legislature based on the ruling by the Supreme Constitutional Court, the country's highest tribunal.
The military announced a "constitutional declaration" on June 16 that gave it legislative powers in the absence of parliament and stripped Morsi of much of his presidential authority. It also gave the generals control over the process of drafting a new constitution and immunity from any civilian oversight.