With this, the deadlock between ruling PML-N and the opposition over picking up an interim prime minister has finally come to an end.
The present government will complete the tenure on May 31 and the caretaker government will take over from June 1 and remain in office until a new government is set up through elections.
Pakistan will hold general elections on July 25, a presidential spokesman has said.
The Election Commission of Pakistan (ECP) in a letter to the president on May 21 had proposed to hold elections for the National Assembly and four provincial assemblies between July 25 and 27.
President Hussain on Sunday approved July 25 as the polling date for general and provincial elections, officials in the President Office said.
Cricketer-turned-politician Imran Khan's Pakistan Tehrik-e-Insaf is expected to be the main challenger to the ruling party in the general elections.
The country experienced its first democratic transition of power in 2013, when the Pakistan Muslim League-Nawaz (PML-N) came out on top as the biggest party.
Since the term of the assemblies would be expiring next week, a caretaker set-up will be installed at the Centre and the provinces to run day-to-day affairs of the government till the time new assemblies are elected.
(With inputs from agencies)