Recent opinion polls have suggested that more than half the 600,000 Montenegrin population want independence, or a clear loosening of ties with Serbia.
Voters in Montenegro will have to decide whether to back the pro-independence Democratic Party of Socialists in the early parliamentary elections.
If the party wins, a referendum would follow within months on breaking away from Serbia, Montenegro's much bigger neighbour and the only other remaining member of the Yugoslav federation.
Recent opinion polls have suggested that more than half the 600,000 Montenegrin population want independence, or a clear loosening of ties with Serbia.
Western leaders have been expressing caution at moves towards full independence, warning that a split from Yugoslavia could cause unnecessary instability in the region.
The referendum itself was approved by parliament in Podgorica on Monday.
'Stabilising' election
The opposition Socialist Peoples' Party is against breaking away from Serbia, and would not go ahead with the referendum if it won the election.
The pro-independence president, Milo Djukanovic, announced he had called the elections earlier than necessary with the aim of boosting political stability.
"We have in the most open manner possible demonstrated our sense of responsibility towards strengthening the process of reforms and democracy, and towards the European development of Montenegro, which is the best way to secure peace and stability in the region," he said.
In the 1999 Nato bombing campaign over Kosovo, Montenegro worked hard to disassociate itself from then president Slobodan Milosevic.
It escaped the full force of the bombing, and succeeded in portraying itself as a pro-western nation.
In the Milosevic years, there were fears that Serbia would not let Montenegro go without a struggle.
The new Yugoslavia, under President Kostunica, still wants Montenegro to stay, but he has promised that no force will be used to stop it leaving.
Map redrawn again
Nevertheless, there is still concern in some quarters that yet another redrawing of the map of the Balkans might spark a new round of separatist hopes, possibly in Kosovo itself.
The Bosnian and Croatian civil wars which followed their decisions to break away from Belgrade produced the worst violence and war crimes seen in Europe since the Second World War.
Slovenia and Macedonia also split from Belgrade, but without ending up at war.