Cowen declared a formal end to his government two months after he was forced to negotiate a $92 billion loan package from the European Union and International Monetary Fund.
The prime minister had insisted that Ireland did not need the loan package.
"I believe we have worked hard to correct past failures and to secure the future recovery of our country," Cowen said to a somber parliament.
Only lawmakers from his long-ruling Fianna Fail party stood to applaud him.
The Fianna Fail party is expected to suffer a battering of historic proportions in the Feb. 25 vote.
Cowen agreed to an early election, rather than trying to serve his full term to mid-2012, after suffering a string of humiliations and losing his parliamentary majority last month.
On Monday, Cowen, 51, announced his retirement from politics after a 26-year career. He became Ireland's first sitting prime minister not to seek re-election to parliament.
Recent polls rated Cowen as the most unpopular leader since Ireland won independence from Britain in 1922; he's leaving office with an 8 percent approval rating.
The Associated Press contributed to this story.