"It's on. A few moments ago I saw the governor-general and asked that she dissolve this parliament and call the federal election for September 7," Rudd said in an email to Labor party members.
"Australians now face a choice...And the choice couldn't be starker," Rudd said.
Earlier, Rudd flew in to Canberra this afternoon to visit the Governor-General and formally ask Quentin Bryce to issue the writs for a poll.
The five-week campaign will see Rudd hoping to complete a comeback for the Labor Party after he first assumed the prime minister' office with his landslide victory over conservative leader John Howard in 2007 polls, which ended suddenly in mid-2010 when his Labor colleagues turned on him and voted in Gillard.
Also Read
"The Australian people therefore face a real choice for this election."
The campaign follows Friday's mini-budget, according to which, the unemployment is expected to hit 6.25 per cent in 2013-14 and 2014-15.
"Softening conditions could force an extra 70,000 Australians out of the workforce as growth slows and Commonwealth revenue collapse by 33.3 billion Australian dollars over the next four years," The Age said.
Failing terms of trade and declining tax revenues have lifted this year's projected deficit 12 billion to 0.1 billion dollars, despite 17.4 billion in spending cuts, the paper added.
"Nearly 800,000 Australians were likely to be jobless in coming months," Hockey said.