"I consider it necessary to suspend the November 27, 2004 constitution, to dissolve parliament as well as the government," Djotodia said.
"During that transition period which will lead us to free, credible and transparent elections, I will legislate by decree."
He added: "We will lead the people of Central African Republic during a three-year transition period, in accordance with the Libreville Accord."
His announcement comes after his Seleka rebels seized the capital Bangui and forced Francois Bozize the country's president into exile in Cameroon.
The African Union has suspended the Central African Republic and imposed sanctions on rebel leaders.
About 5,000 Seleka fighters swept into Bangui on Sunday after the collapse of the Libreville Accord power-sharing deal.
It collapsed when Seleka withdrew its members from the government.
South African President Jacob Zuma said at least 13 South African soldiers were killed in the battle against the rebels on Sunday.
The troops had been stationed in Bangui to support government forces.
"We are deeply saddened by the events and developments in that country over the past 72 hours which saw violence escalating and many innocent lives lost," Zuma said.
The announcement has raised questions about the future role of South Africa's 200-soldier contingent it sent to the Central African Republic in January to support the government troops after the rebels launched an offensive in early December.
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