Spanish Prime Minister Mariano Rajoy on Friday dissolved Catalan Parliament to impose direct ruler over it and called for a new regional election on December 21, according to media reports.
This came hours after the Catalonia parliament voted to declare independence from Spain and proclaimed to be a republic.
Prime Minister Rajoy called for calm and said the rule of law would be restored in Catalonia, which is gripped in political crisis, since past three years.
Reports further said that the Catalan declaration was celebrated by a large number of independence supporters, who gathered outside the regional parliament in Barcelona, shouting "Liberty" in Catalan, as the independence vote went through.
In the vote, boycotted by the opposition, 70 approved in favour of the motion declaring independence while 10 voted against it.
This major development comes just weeks after the Catalan independence referendum of 2017, which was declared illegal, where, 92 percent of people voted backing independence.
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Before Madrid's imposition of direct rule over it, Catalonia enjoyed wide autonomy, including control over its own policing, education and healthcare.
Catalan nationalists have always argued that the region is a separate nation with its own history, culture and language, and that it should have increased fiscal independence.