Gavin Short, chairman of the Falklands' legislature, made the announcement ahead of Thursday's 30th anniversary of the end of the brief 1982 war between Britain and Argentina over the islands, which saw more than 900 people die.
Tensions have risen ahead of the June 14 anniversary, with Argentina's President Cristina Fernandez planning to press her country's case at a meeting of the U.N.'s decolonization committee to be held on Thursday in New York.
Short said he hoped that a referendum would help the Falklanders "convey a strong message to the outside world," about their desire to retain ties to London.
"We are holding this referendum not because we have any doubts about who we are and what future we want, but to show the world just how very certain we are about that," Short said in a statement.
He said that he had no doubt that the people of the Falklands "wish for the islands to remain a self-governing overseas territory of the United Kingdom."
British Prime Minister David Cameron said the U.K. would abide by whatever choice the islanders make when they hold their vote—and urged Argentina and its allies to do the same.
"Britain will respect and defend their choice. We look to all U.N. members to live up to their responsibilities under the U.N. charter and accept the islanders' decision about how they want to live," he said.
Argentines insist Britain has illegally occupied the islands they call the Islas Malvinas since 1833. Britain accuses Buenos Aires of ignoring the wishes of the island's population of about 3,000 people.
A total of 649 Argentines and 255 British soldiers died in the 1982 war fought between the nations over the archipelago, prompted by the Argentine invasion of the islands.
"Thirty years ago they made clear that they wanted to stay British," Cameron said. "That's why British forces bravely liberated the islands from Argentine invaders."
Britain's Latin American minister Jeremy Browne, who arrived in the Falklands on Sunday for a week-long visit, said the referendum would give the population a chance to "send a clear message—not just to Argentina, but to the whole of the international community—that the Islanders, and they alone, are masters of their fate."
Browne has criticized Argentina's recent attempts to stifle the islands' economy by turning away cruise ships carrying the British flag, restricting flights that pass through the islands from its own airspace and launching lawsuits against five British companies involved in oil exploration off the coast of the Falklands.
Cameron's office said the Falklands government had discussed its plans for a referendum with Britain, but insisted it had no role in prompting the decision.
"They discussed it with us, but it's their decision and we support it," said a spokeswoman for Cameron's office, on condition of anonymity in line with policy.