Karzai's presidential term is due to end on May 21, creating the potential for a constitutional crisis if polls are held much later.
The country's Election Commission has fixed elections for Aug 20.
The president has no power to unilaterally choose election dates. According to Article 61 of the country's constitution, elections should be held 30 to 60 days before May 22, the end of Karzai's five-year term.
Some observers see this announcement as a clever political move by Karzai.
The BBC quotes international monitors as saying that it would be difficult to hold a fair election so soon, because of security concerns, bad weather and the logistical challenges of getting ballots.
The Independent Election Commission (IEC) said there was a contradiction between the constitution and electoral law, which meant the President, could stay in power until Oct.
Karzai has been accused of using existing laws to illegally extend his rule in breach of the constitution.