Government spokesperson Siripong Angkasakulkiat told Reuters the move followed a disagreement with the largest grouping in parliament, the opposition People's Party.
"This happened because we can't go forward in parliament," he told Reuters.
Thailand's King Maha Vajiralongkorn later endorsed the decree, making way for early elections, which by law must be held within 45 to 60 days.
The political turmoil coincides with a fourth day of a fierce border conflict between Thailand and Cambodia in which at least 20 people have been killed and nearly 200 wounded.
Anutin told reporters on Wednesday that dissolving parliament would not impact Thailand's military operations along the frontier, where clashes have broken out at more than a dozen locations, some involving exchanges of heavy artillery.
"I am returning power to the people," Anutin said on social media.
He is Thailand's third prime minister since August 2023, and political instability is taking a toll on Southeast Asia's second-largest economy, which is grappling with US tariffs, high household debt and weak consumption.
In September, Anutin had said that he planned to dissolve parliament by the end of January, with a general election to be held in March or early April, but this move would accelerate that timeline.
Anutin took power after pulling his Bhumjaithai Party out of a ruling coalition and securing the backing of the People's Party, which put forward a number of demands - including a referendum on constitutional amendments - as part of a deal to support him.
"When the People's Party couldn't get what they want, they said they will submit a no-confidence motion and asked the PM to dissolve parliament immediately," Siripong said.
Natthaphong Ruengpanyawut, leader of the People's Party, told reporters that the Bhumjaithai Party did not follow the terms of their agreement.
"We have tried to use the voice of the opposition to push forward amending the constitution," he said.
