The referendum will take place on August 29, Prime Minister Kristrún Frostadóttir said at a press conference, according to public service broadcaster Rúv.
The Althingi in Reykjavik will now take a position on the matter.
Iceland's negotiating position is good right now, and the government believes that Iceland is strong enough to make this decision now, Frostadóttir said.
Iceland is facing an important decision, EU Enlargement Commissioner Marta Kos said in a statement.
