In his first major act of assertiveness, the first democratically elected president recalled the lower house of the parliament to resume its legislative responsibilities that had been taken over by the military.
The presidential decree said new parliament elections will be held within 60 days of the ratification of the new constitution, and till that time the earlier elected representatives will continue as lawmakers.
The decree defies the June 14 ruling by the Supreme Constitutional Court to dissolve the parliament on grounds that its election had violated certain norms.
The court ruling that came days before the presidential run-off that elected Mursi, had been deeply unpopular in the country.
Following the ruling, the military took over the legislative functions of the parliament, further exacerbating unrest among Egyptians, who saw the moves as the Army's attempt to hold on to power.
The Muslim Brotherhood's Freedom and Justice Party dominated the recently elected parliament of Egypt, holding along with its allies 235 of the 498 seats. The Salafist Al Nour party and its allies have 123 seats, while the socialist bloc New Wafd had 38 seats.