"As result of consultations with Mr Bahceli, we decided to hold elections on June 24, 2018, a Sunday," said Erdogan.
Bahceli stunned Turkish political observers on Tuesday when he urged the government not to wait for November 2019 to hold the presidential and parliamentary elections.
Bahceli told MHP lawmakers that the elections should in fact be held on August 26, 2018.
But the date announced by Erdogan is even earlier and will precipitate an intense and hurried election campaign as opposition parties seek to challenge the Turkish strongman.
The MHP chief's intervention surprised commentators since the government led by Erdogan has repeatedly insisted there will be no early elections. Bahceli met Erdogan earlier at the presidential palace to discuss the proposal in an eagerly-awaited meeting that lasted only half an hour, the presidency said. In a highly unusual move, Erdogan then made his statement in person at the palace, standing in front of a row of Turkish flags.
The elections are significant as a new executive presidency - agreed in a 2017 referendum and denounced by the opposition as giving the head of state authoritarian powers - will come into force. The polls will also give Erdogan a chance to extend his stay in power with a new-five year mandate, after already serving 15 years in power as premier and then president.
Erdogan has established a formal alliance with the MHP to fight the elections, making it hard for his party to dismiss Bahceli's call out of hand. MHP leader since 1997, Bahceli is seen as a kingmaker in Turkish politics and has played a role in some key moments of its modern history.
He prompted the 2002 snap polls that brought Erdogan's Justice and Development Party (AKP) to power. The AKP has ruled Turkey ever since. Bahceli, who has led the MHP since 1997, used to be an outspoken critic of Erdogan but has closely aligned with the president since the July 2016 failed coup aimed at ousting him from power.
Analysts had said that the state of the Turkish economy could have tempted the government to consider the early election call and hold polls before there is any serious deterioration.
While growth in Turkey was 7.4 percent in 2017, double-digit inflation, a wide current account deficit and the need for debt restructuring at top companies could be harbingers of trouble ahead.
Kemal Kilicdaroglu, the head of the main opposition Republican People's Party, said Tuesday he welcomed the prospect of early polls. "And we will send them (the AKP) out," he said.