The Prime Minister made the long-awaited announcement after meeting with minsters at Downing Street to discuss reforms he secured yesterday following two days of talks in Brussels.
Speaking outside the door of Number 10, he said the cabinet had agreed that the Government’s official position would back an “in” vote.
“We are approaching one of the biggest decisions this country will face in our lifetimes,” he added.
“The choice goes to the heart of the kind of country that we want to be and the kind of future we want for our children.“
The Prime Minister said the task of reforming Europe continues but cited terrorism, intelligence, trade, freedom of movement and employment among the reasons to stay in the EU.
“I do not love Brussels, I love Britain...the question is - will be we safer, stronger and better off working together in a reformed Europe or out on our own?” he added.
“Leaving Europe would threaten our economic and national security.”
Mr Cameron said the legal process securing the referendum would start on Monday and addressed the British people to say “whatever your decision, I will do my best to deliver it. The choice is in your hands.”
It was the first time the UK’s cabinet has met on a Saturday since the Falklands War more than 30 years ago, showing the significance of the occasion.
Ministers are now free to publicly back the “leave” campaign and Michael Gove, Iain Duncan Smith and Chris Grayling are believed to be among those opposing the Government’s official stance.
“I know there will be many passionate arguments over the months ahead and individual cabinet ministers will have the freedom to campaign in a personal capacity as they wish,” Mr Cameron said this afternoon.
The Prime Minister personally vowed to campaign for Britain to stay in the 28-nation bloc “with all my heart and soul” after securing a package of changes with European leaders.
He said the reforms, which include curbs on EU workers' benefits, protections for non-euro nations and an opt-out from “ever closer union”, cemented Britain's “special status” despite a series of compromises.
But Eurosceptics - including many within Mr Cameron's Conservative Party - dismissed the package as meaningless and said only withdrawal could restore sufficient powers to the country from Brussels.
Nigel Farage dismissed the “truly pathetic deal” and urged voters to seize the “golden opportunity” to vote for a Brexit, which is Ukip’s foundational principle.
Jeremy Corbyn dismissed Mr Cameron's re-negotiation as a “sideshow” but confirmed Labour would be campaigning for an ”in“ vote.
"Despite the fanfare, the deal that David Cameron has made in Brussels on Britain's relationship with the EU is a sideshow, and the changes he has negotiated are largely irrelevant to the problems most British people face and the decision we must now make," he said.
"We will be campaigning to keep Britain in Europe in the coming referendum, regardless of David Cameron's tinkering, because it brings investment, jobs and protection for British workers and consumers."
Additional reporting by PA
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