The president agreed to hold the election before the end of the year, as part of a deal to end the crisis.
"I am initiating an early presidential election. I am also initiating a return to the 2004 Constitution with the redistribution of powers toward a parliamentary republic," Yanukovych said.
The president said that he was ready to form a new government to end violence, which left dozens of people dead and hundreds others injured, reported Xinhua.
Anti-government rallies turned violent Tuesday, when protestors attacked police with petrol bombs and set fires outside parliament. Police responded with stun grenades and water cannons. The confrontation left at least 77 people dead and hundreds other injured.
The protests first erupted in November last year when Yanukovych rejected a landmark association and trade deal with the European Union in favour of closer ties with Russia.
Yanukovych met the opposition leaders and international mediators - the foreign ministers of Poland, France and Germany and the chairman of Russia's Human Rights Commission - Thursday night to seek ways out of the ongoing standoff triggered by the protests.
The president made concessions for the opposition in a bid to avoid further bloodshed and casualties among the demonstrators and police officers.