Catalan President Carles Puigdemont says Catalonia will not accept Madrid's plan to curb the region's autonomy.
In a statement, Mr Puigdemont described the imposition of direct rule as the worst attack on Catalonia's institutions since the Franco dictatorship.
Spanish PM Mariano Rajoy's plans include the removal of Catalonia's leaders, and curbs on its parliament.
It follows the independence referendum that went ahead despite being banned by Spain's Constitutional Court.
Mr Puigdemont said the Spanish government was acting against the democratic will of Catalans after refusing all offers of dialogue.
He said he would call for a session in the Catalan parliament to debate a response to Mr Rajoy's plans.
Addressing European citizens in English, he added that the European Union's founding values were "at risk in Catalonia".
Spanish PM invokes constitution
After an emergency cabinet meeting on Saturday, Mariano Rajoy stopped short of dissolving the region's parliament but put forward plans for elections.
The measures must now be approved by Spain's Senate in the next few days.
Large crowds have gathered in Barcelona to protest against direct rule from Madrid.
Mr Rajoy said the the Catalan government's actions were "contrary to the law and seeking confrontation". He said it was "not our wish, it was not our intention" to impose direct rule.
This will be via Article 155 of Spain's constitution, which allows it to impose direct rule in a crisis on any of the country's semi-autonomous regions.
Spanish law dictates that elections must be held within six months of Article 155 being triggered, but Mr Rajoy said it was imperative that the vote be held much sooner.
Reports say that Spain's interior ministry is preparing take control of Catalonia's Mossos police force and remove its commander Josep Lluís Trapero, who is already facing sedition charges.
The government is also considering taking control of Catalonia's public broadcaster TV3, El País newspaper reported.
Catalan Vice-President Oriol Junqueras said Mr Rajoy and his allies had "not just suspended autonomy. They have suspended democracy".
Barcelona Mayor Ada Colau said it was a "serious attack on the rights and freedoms of all, both here and elsewhere" and called for demonstrations.
The president of Barcelona football club, Josep Maria Bartomeu, said the club gave its "absolute support for the democratic institutions of Catalonia chosen by its people".
But he called for any reaction to be "civil and peaceful" and said dialogue was the only way to a solution.
Eduard Rivas Mateo, spokesman for the Catalan Socialist party - which supports the Spanish government's stance but also wants constitutional reform - said he could not accept a "harsh application" of Article 155.
But Inés Arrimadas, head of the centrist Ciudadanos party in Catalonia, which is against independence, said holding fresh elections would "restore goodwill and democracy" in the region.
How did we get here?
Catalonia's regional government held a referendum on 1 October to ask residents of the region if they wanted to break away from Spain.
Of the 43 percent of Catalans said to have taken part, 90 percent voted in favour of independence. But many anti-independence supporters boycotted the ballot, arguing it was not valid.
Mr Puigdemont and other regional leaders then signed a declaration of independence, but immediately suspended it in order to allow for talks.
He then defied two deadlines set by the national government to clarify Catalonia's position.