Speaker Krivokapic (r) shouted: "Long live Montenegro!"
There were public celebrations, but a fireworks display on Saturday evening was spoilt by heavy rain.
The move officially recognises the result of a referendum two weeks ago, when a slim majority backed the move.
But correspondents say Montenegro is a divided society, with a significant minority backing the union with Serbia.
The last time the region was a country was at the end of World War I, before it was absorbed into the newly-formed Yugoslavia.
The red-and-gold Montenegrin flag, dating back to that period, was flown after the speaker Ranko Krivokapic declared: "Long live Montenegro!"
The anthem "Oh, The Bright May Dawn" was played in the parliament chamber.
The country hopes independence will make it more prosperous
Earlier this week, the Montenegro Referendum Commission formally confirmed the result of the referendum, in which 55.5% of the people voted to secede from Serbia, just above the necessary threshold of 55%.
Negotiations between Belgrade and Podgorica on how to disentangle the two states are expected to begin shortly.
They will include everything from property rights and university fees to military facilities and work permits.
Serbian President Boris Tadic sent a message of congratulation wishing the people of Montenegro "peace, stability and overall prosperity".
"Serbia will be the closest friend," he went on.
"I am in favour of preserving family, historic, cultural, economic and political ties, because they present an unbreakable bond between our two countries."
Next week Serbia is expected to declare its own independence, finally bringing to an end the break-up of the six republics of the former Yugoslavia into six fully-fledged states.
The flag of Montenegro.
Montenegro is preparing today to declare its independence from Serbia in a special parliamentary session in the capital, Podgorica. The official announcement comes two weeks after a referendum, where just over 55% of voters chose to support the split.

The 650,000-strong nation has been tied in this current union with Serbia since 1918, and the two countries are the last to remain joined since the dissolution of Yugoslavia. This evening, the alliance will come to an end to the sounds of the Montenegrin national anthem, which will be played to mark the occasion.

The main feature of tonight's session is to be the reading of the official declaration, which prioritises Montenegrin membership of the European Union and NATO. A draft version of the document states that  "Montenegro is determined to build its state policy by respecting the principles of the United Nations, EU, Council of Europe and Organization for Security and Cooperation in Europe."

The location of Montenegro within Serbia and Montenegro.
Despite initial intentions that the event be low-key, thousands are expected to turn out in celebration of the split. Among those not expected to attend the session is Serbian Prime Minister Vojislav Koštunica, who openly supports pro-union movements. Koštunica is not the only Serbian official who is against the separation: Serbia and Montenegro's President, Svetozar Marović, has reputedly resigned today ahead of tonight's events.

The session is set to begin at 8 p.m. local time (1800 UTC), and will include the presentation of a final report by Slovakian diplomat František Lipka, who is the head of the referendum's commission.