In a highly unusual television interview, Mr Yeltsin said that his medical advisers had informed him that he either had to have a cardiac operation, or should work "passively".
Speaking slowly but clearly, the president said: "Passive work never suited me. Nor can it suit me now. That's why an operation and full recovery, as they promise, is better than passive activity."
The surgery is expected to take place at a cardiological centre in Moscow - Mr Yeltsin was quick to scotch rumours that he will be travelling abroad for the operation - at the end of the month.
According to Reuters, Kremlin aides have indicated that he expects "routine" by-pass surgery, replacing clogged arteries to the heart.
Reports have circulated for weeks alleging that Mr Yeltsin's heart condition, which flared up twice last year, had returned following his super-charged election campaign, in which he travelled much of the country, sporting the slogan "Vote with Your Heart".
The latest flurry of speculation began when the 65-year-old president suddenly dropped out of view after the first round of the presidential election in June, finally retreated for a holiday in a country hunting lodge.
As his absence persisted, his aides blamed acute weariness from the election campaign, although few commentators believed them. The president's abrupt announcement, made to the little known television agency, RIA Novisti, appears to mark a change in policy within the Kremlin, where generations of leaders have kept mum about their health problems.
Mr Yeltsin said he wanted a "society based on truth" - a remark that acknowledges that the misinformation circulated by his aides has done nothing to end international speculation about his condition, but has done much to create the impression that there is a vacuum at the heart of the Russian government.
His openness had an immediate impact on Russian stock prices, which fell sharply. Meanwhile, the White House said Bill Clinton wished him a "full and speedy recovery".
The key question now facing Russia is who takes control while Mr Yeltsin is out of action. Under the constitution, Viktor Chernomyrdin should step in, but he has been wrestling for influence with the enfant terrible of the Kremlin, Mr Lebed, ever since the latter was appointed secretary of the Security Council. Anatoly Chubais, the president's youthful chief- of-staff, is also jockeying for influence.
The issue arises at a time when Russia is embroiled in some explosive political issues, including resolving the war in Chechnya. Alexander Lebed, the president's peace envoy, yesterday met the Chechen rebel chief-of- staff, Aslan Maskhadov, in the war zone to discuss further aspects of his fragile peace deal, signed last month.
Mr Yeltsin used his television appearance to announce that - after days of apparently shunning Mr Lebed - he now supported the recently signed peace deal in Chechnya, although he was critical of one of its key components: a speedy withdrawal of Russian troops.
If this was an attempt to steer public attention away from his health problems, it failed. The announcement of his pending heart surgery led television news broadcasts last night.Reuse content