Shortly after Artur Mas set the vote for November 9, the Spanish government said the referendum would not take place because it was "unconstitutional".
Deputy Prime Minister Soraya Saenz de Santamaria warned that no one "was above the national will of the Spanish people".
The government immediately began the process of appealing to the Constitutional Court, which is expected to annul the decree signed by Mas.
The independence movement in Catalonia has gathered strength in recent years.
"Catalonia wants to express itself, it wants to be heard and it wants to vote," Mas said after he signed the decree calling a referendum in a ceremony at the Generalitat Palace in Barcelona.
The Spanish government's response was swift, with Saenz de Santamaria telling a news conference in Madrid: "This referendum will not take place because it is unconstitutional.
"We deeply regret the president's move and we consider it to be a mistake -- it will cause Catalan society to fracture, it will divide the Catalans and distance them from Europe," she said.
Catalonia is Spain's economic powerhouse, although it too suffered in the property crash and the resulting crisis that gripped the country from 2008 to 2012.
Proud of their Catalan language and culture, many of the region's 7.5 million inhabitants feel short-changed by the government in Madrid, which redistributes their taxes.
Catalonia formally adopted the status of a "nation" in 2006 but the Constitutional Court threw out the attempt.
Prime Minister Mariano Rajoy has described a Catalan vote on independence as illegal and said he would fight to defend the unity of Spain.
Mas has hinted that if the government blocks the vote, he could call early regional elections in Catalonia which would effectively act as a plebiscite on the issue.
A group of pro-independence protesters who had gathered in front of the Generalitat, waving the independence banner, praised Mas's move.
Tanha Bueno, a 34-year-old civil servant, said: "What was until now just a dream is now within reach and I am filled with hope."
Josep Pena, 59, said: "The president must do what the people are demanding -- build a new country.
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