Najib, who took office as Prime Minister from Tun Abdullah Ahmad Badawi on April 3, 2009, have introduced the 1Malaysia concept as the ruling party's branding and have implemented various transformation programmes.
"The king has permitted for parliament to be dissolved effective Saturday, April 7", Najib said in a special address on the state television.
Mahathir served as prime minister for 22 years before retiring in 2003, but returned to politics after corruption allegations involving Najib surfaced in 2015.
A general election was widely expected to be called a year ago, but Najib held off, apparently to allow time for the introduction of budgetary reforms aimed at lower income families and rural voters, who make up a key voting bloc for his ruling BN coalition.
Najib's United Malay National Organisation party has led every BN coalition since Malaysia gained independence from British rule in 1957.
He's also suspected of trying to manipulate the popular vote after backing legislation to redraw the electoral map. He denies any wrongdoing and has been cleared by the attorney-general who said the money was a donation from the Saudi royal family.
A total of 222 parliamentary seats and 505 state seats are at stake.
Najib has so far weathered the 1MDB scandal by lurching sharply to the right with a crackdown that has seen numerous critics arrested, and analysts believe he is on course to win a third term.
With the common goal of taking down Mr Najib, Mr Mahathir has joined hands with his former deputy and jailed opposition leader, Anwar Ibrahim, ending a bitter feud that had shaped the country's political narrative over two decades.