The Basque separatist group Eta says its ceasefire with the Spanish government will end at midnight.
Eta has been fighting for a Basque state since the late 1960s
Prime Minister Jose Luis Rodriguez Zapatero condemned Eta's move.
"Eta's decision goes totally in the opposite direction of the path that Basque and Spanish society want, the path of peace," he said.
Eta declared a "permanent" ceasefire in March 2006, and had insisted it still held despite a bomb that killed two people at Madrid airport in December.
But in a message printed by the Basque newspaper Berria on Tuesday, the banned group said "minimum conditions for continuing a process of negotiations do not exist".
After the Madrid airport attack Spain's Socialist government broke off peace talks.
Eta said that from Wednesday it would defend the Basque country "with weapons and on all fronts".
The announcement suggests that another big attack could be imminent, observers say.
The group has killed more than 800 people in its four-decade campaign to set up an independent state in northern Spain and south-western France.
Despite last December's attack, Eta's activities have been waning, with the number of bombings falling in recent years.
Talks break down
Mr Zapatero launched exploratory peace talks with Eta last year, despite vehement opposition from conservatives, but there was little sign of any progress.
The opposition Popular Party and victims' groups have organised big demonstrations against negotiations with Eta.
The latest Eta statement blamed Mr Zapatero, saying the government had responded to its ceasefire last year "by pursuing detentions, torture and persecution".
The atmosphere was further soured by the authorities' exclusion of pro-independence politicians from local elections in the Basque country last month. Eta's political wing, Batasuna, remains banned.
In the past few days, Eta has sent letters to Basque businesses urging them to help finance "the liberation and construction of Euskal Herria (the Greater Basque Country)", Spanish media report.