The regional authority has backed a motion to make the Catalan Republic an “independent, and sovereign, democratic and social state of law”.
Oriol Junqueras, Catalan vice-president and leader of the left-wing pro-independence ERC party, tweeted: “Yes. We have won freedom to build a new country.”
But Catalonia is not able to simply split from Spain.
The declaration has plunged Catalonia into political chaos and mass protests could break out when Madrid moves to stop Catalonia breaking away.
The Spanish government is already ready to take control of Catalonia. There will be a special cabinet meeting at 6pm local time to enforce direct rule over Catalonia.
Prime Minister Mariano Rajoy said: “Spain is a serious country and a great nation and we will not tolerate that a few people try liquidate our constitution.”
Spain’s government has already triggered Article 155 of its constitution, which allows it to suspend Catalonia’s political autonomy.
The Prime Minister said that he will curb the powers of Catalonia’s parliament as well as sack its government and call for an election within six months.
Mr Rajoy argued that the move will restore the rule of law and preserve cicivl right by preventing the autonomous region to breakaway from Spain.
European Council President Donald Tusk also confirmed that declaration of independence has changed nothing and the European Union will only deal with the central government in Madrid.
“For EU nothing changes. Spain remains our only interlocutor,” Mr Tusk said on Twitter. He added Spain to favour “force of argument, not argument of force.”
Catalonia now faces yet more civil unrest after a majority of voters backed breaking away from Spain in an outlawed independence referendum this month.
Catalan officials say that 90 per cent of voters backed independence in Sunday’s referendum which the Spanish government said was illegal.
More than 900 protesters were injured during violent clashes with the police who tried to seize ballot boxes and stop the referendum from happening.