The country's capital Zagreb was hit by huge anti-government protests last month.
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The Croatian parliament was dissolved on Thursday to pave the way for a parliamentary election later this year, with 143 out of 151 lawmakers backing the decision.
Prime Minister Andrej Plenkovic has suggested the election could be held before the vote for the European Parliament, which takes places on June 6-9, but no date has yet been set.
The decision to dissolve parliament comes as Plenkovic and his conservative Croatian Democratic Union (HDZ) party are facing mounting accusations of high-level corruption from the opposition ahead of the ballot.
Last month, thousands of protesters rallied in Croatia’s capital to protest against the government and demand that this year’s parliamentary election be held as soon as possible.
The prime minister has denied any wrongdoing.
Plenkovic and HDZ are expected to be challenged by a group of centre and left-leaning parties who have already announced they will run in a coalition. The prime minister’s party has held power since Croatia gained independence from the former Yugoslavia in 1991.
Croatia is also scheduled to hold a presidential election as well by the end of the year.
The country, a nation of some 3.8 million people which was the latest to join the European Union, remains one of the poorest economies in the bloc, surviving largely on tourism along its Adriatic Sea coastline.