The king stepped aside Sunday following intense speculation about his future after reports surfaced in recent weeks that he had taken medical leave, and then Wednesday the former Miss Moscow.
Muhammad V is the first monarch to abdicate the throne since the Muslim-majority country gained independence from Britain in 1957.
Malaysia is a constitutional monarchy, with a unique arrangement where the throne changes hands every five years between rulers of the country's nine states headed by centuries-old Islamic royalty.
"To Malaysian citizens, Seri Paduka Baginda Tuanku has urged that they unite to maintain unity, be tolerant and together assume responsibility towards this sovereign country so that Malaysia continues to be in peace and harmony", he added.
In a statement, the palace said the king was grateful for the opportunity. But the monarch is highly regarded, particularly among the ethnic Malay Muslim majority, as the supreme upholder of Malay tradition. "Long live the King!" former prime minister Datuk Seri Najib Razak said on Facebook.
It's the first abdication in Malaysia's history.
The council comprises nine hereditary state rulers who take turns as Malaysia's king for five-year terms.
According to official sources, four of the nine state rulers had begun to discuss how to resolve the matter early last month, including the rulers of Perak, now the Deputy King, and Perlis, one of the more senior royals.
Keeper of the Ruler's Seal, Syed Danial Syed Ahmad, announced on Monday the Council of Rulers held a meeting and set a date of January 24 to elect a new king.
Dr Mahathir said the election had to be expedited as he needed to have an audience with the Yang di-Pertuan Agong on certain matters. Based on the historical rotation, the next kingship term may go to the Sultan of Pahang, Ahmad Shah, who didn't attend the Monday meeting of Malay rulers for health reasons.
The ST cited reports that the couple has visited a fertility clinic in Germany because Sultan Muhammad's first marriage was childless and he is desperate to start a family.
King Muhammed V served as Malaysia's largely ceremonial chief of state until he unexpectedly resigned on Sunday.