Military chiefs, vowing to restore order in a country racked by demonstrations over Mursi s Islamist policies, issued a call to battle in a statement headlined "The Final Hours".
They said they were willing to shed blood against "terrorists and fools" after Mursi refused to give up his elected office.
Less than three hours before an ultimatum was due to expire for Mursi to agree to share power or make way
for an army-imposed solution, the president s spokesman said it was better that he die in defence of democracy than be blamed by history.
In an emotional, rambling midnight television address, Mursi said he was democratically elected and would stay in office to uphold the constitutional order, declaring: "The price of preserving legitimacy is my life."
Liberal opponents said that showed he had "lost his mind".
Two army armoured vehicles took up position outside state broadcasting headquarters on the Nile River bank and most staff were evacuated from the building, security sources said.
The state news agency MENA said civil servants were occupying the cabinet office and would not let Prime Minister Hisham Kandil enter the building.
The official spokesman of Mursi s Muslim Brotherhood movement said supporters were willing to become martyrs to defend him.
"There is only one thing we can do: we will stand in between the tanks and the president," Gehad El-Haddad told Reuters at the movement s protest encampment in a Cairo suburb that houses many military installations and is near the presidential palace.
"We will not allow the will of the Egyptian people to be bullied again by the military machine."
The Egypt25 television station owned and run by the Brotherhood was continuing to broadcast live split-screen coverage of pro-Mursi demonstrations.
The state-run Al-Ahram newspaper said Mursi was expected to either step down or be removed from office and the army would set up a three-member presidential council to be chaired by the head of the Supreme Constitutional Court.
A military source said he expected the army to first call political, social and economic figures and youth activists for talks on its draft roadmap for the country s future.
Political sources said armed forces commander General Abdel Fattah al-Sisi met the main liberal opposition leader, Nobel peace laureate Mohamed ElBaradei, the heads of the Muslim and Christian religious authorities and leaders of smaller Islamist parties on Wednesday. A military source denied that Sisi and ElBaradei were meeting.
The Brotherhood s political arm, the Freedom and Justice Party, refused an invitation to meet Sisi, saying it only recognised the elected president.
A military spokesman said there was no time set for an official statement or speech by the armed forces command.
A mass of revellers on Cairo s Tahrir Square feted the army overnight for, in their eyes, saving the revolutionary democracy won there two years ago when an uprising toppled autocratic President Hosni Mubarak in 2011.
Large crowds were gathering in the square again on Wednesday afternoon.
But Mursi s backers denounced the army s intervention as a coup. At least 16 people, mostly supporters of the president, were killed and about 200 wounded when gunmen opened fire overnight on pro-Mursi demonstrators at Cairo University campus.
The Muslim Brotherhood accused uniformed police of the shooting. The Interior Ministry said it was investigating.
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