The Catalonian parliament voted 70-10 to create “a Catalan republic as an independent and sovereign state” in a ballot boycotted by unionist MPs.
At the same time, Madrid agreed to impose direct rule over Catalonia.
Fernando Martínez-Maíllo, chief spokesman for the ruling Popular Party, said the government will “proceed in a matter of hours to restore legality in Catalonia with the application of Article 155”.
Spanish Prime Minister Mariano Rajoy has said that a special cabinet meeting will be held at 5pm BST.
Catalonia’s leader Carles Puigdemont could be removed from power as early as tomorrow. But Mr Puigdemont has called on supporters to remain “calm and peaceful”.
Speaking to celebratory crowds earlier this afternoon, he said: ”Today our parliament, legitimate parliament, a parliament that came out of a democratic election, has taken a very important step.
“Democratically elected leaders voted for the will of the people. Citizens of Catalonia, a time is approaching when we will have to maintain the pulse of this country, from an attitude of peace.”
How will Spain take control of Catalonia?
Madrid has said that security in Catalonia is its main priority.
Last weekend Mr Rajoy said that the entire Catalan cabinet would be dismissed, with Madrid assuming all powers of the executive.
The Catalan parliament would have its powers limited, with a new regional election to be held in six months.
The Spanish government would take control of the prosperous region’s finances, including all taxation and public spending.
It is believed that new leadership will be imposed on the region’s Mossos d’Esqudra police force, replacing the current chief, Major Josep Lluís Trapero.
The main secessionist group in Catalonia has called on civil servants not to follow orders from Madrid, and to respond with “peaceful resistance”.
What will happen to the Catalan leader?
Spain’s public prosecutor has previously threatened to charge Mr Puigdemont with treason if independence is declared.
Mr Puigdemont has said that he is “not afraid” of being arrested, but said that it would be “a barbaric step”.
Will Catalonia and Spain go to war?
Some fear that the conflict between Catalonia and Spain could lead to another Spanish Civil War.
Madrid’s handling of Catalonia is seen as one of the triggers of the war which broke out in 1936 and killed more than 500,000.
Political and military analyst Sara Plana has said that Catalan independence could “reveal the fragility of the project of Spanish governance”, which is why she says “the state may be willing to go to war to preserve it”.
READ MORE: WILL CATALONIAN INDEPENDENCE BE THE START OF A SPANISH CIVIL WAR?