Nationalist Party official Tseng Yung-chuan said the party's Central Standing Committee had approved the measure during a special meeting.
"We can't wait two years to end Taiwan's fear," Tseng said, referring to the time left in Chen's term. "We must solve it at once."
"(Chen's) honesty has been called into doubt from a legal standpoint. He has abused his power and broken the law," he added.
A referendum to recall Chen would require the support of two-thirds of Taiwan's 225-seat legislature before it could be presented to the island's voters for approval.
In recent days, Nationalist Chairman Ma Ying-jeou has come under heavy pressure from the party to back a recall initiative.
After the yes vote, Ma explained why the Nationalists had decided to press forward with the issue.
"For the past week, we have called on President Chen Shui-bian to use the method to take responsibility with the least cost to society, and resign voluntarily," he said.
"But we have found that he put the interests of the party above those of society."
While opinion polls suggest Chen could lose in a national referendum, he seems in a far stronger position in the legislature, where 35 members of his ruling Democratic Progressive Party would have to vote with the opposition to put the recall before the public.
Still, the Nationalists moved ahead with the process, calculating that a prolonged public debate over the corruption allegations could further weaken the president and even force him to resign, strengthening the hand of the opposition ahead of the 2008 presidential elections.
Political scientist Philip Yang of Taipei's National Taiwan University said the Nationalist strategy is to keep up the pressure on Chen in the hopes of weakening his support among his own Democratic Progressive Party.
"Even though recalling Chen will be difficult, the opposition is hoping that new developments in the (corruption) investigation will convince more DPP lawmakers to side against the president," Yang said.
Before the Nationalists voted, Premier Su Tseng-chang — a DPP stalwart — said the opposition was endangering the rule of law by launching its recall campaign against Chen.
"Chairman Ma, don't destroy the rule of law for the sake of power, don't set a bad example," Su said at a DPP news conference.
The corruption allegations pursued by the Nationalists center on Chen's son-in-law, Chao Chien-min, who was detained last month on suspicion of insider trading, a charge he has denied.
Opposition lawmakers have also accused first lady Wu Shu-chen of involvement in illicit business deals and soliciting favors from business people.
The presidential office denies those charges, though Vice President Annette Lu — a close political ally of Chen's — has called the various corruption allegations and the fallout they have provoked Taiwan's worst political crisis in more than 25 years.
Legislative speaker Wang Jin-pyng said Wednesday that Nationalist and DPP legislative factions would meet on June 11 to try to decide on an agenda for a special legislative session to consider the recall initiative.
He said the earliest the issue could be considered was June 12.
Last Thursday Chen pledged he would cede part of his powers to Su to ease the pressure for his ouster.
But on Monday, the opposition accused Chen of failing to honor his pledge and attempting to appease public opinion by hinting he might appoint an opposition premier.