Republicans picked the same date earlier this month. The Democrats' move Sunday will let both parties continue the tradition of meeting on the same night. The state's caucuses had been scheduled for Jan. 14.
The move, confirmed by party spokesman Chris Allen, means the major remaining question about the calendar is the New Hampshire primary, originally scheduled for Jan. 22. New Hampshire Secretary of State Bill Gardner has said only that he would schedule that primary no later than Jan. 8.
Both Gov. Chet Culver and Sen. Tom Harkin, Iowa's top two Democrats, had pushed for the Jan. 3 date, and Iowa Democratic chairman Scott Brennan last week made that recommendation to the party's state Central Committee, which approved it.
"As a practical matter, I think it will maintain Iowa's first-in-the nation status," Brennan said after the vote.
Asked if the issue could be revisited if another state moved ahead of Iowa, Brennan said "certainly that's a consideration," but he added that he felt it would be the final say in the matter.
"The governor is pleased that it appears we will be first and we will have the caucuses in January," said Culver spokesman Brad Anderson. "It is what he has said all along."
But former GOP House Speaker Newt Gingrich said the decision by Iowa and some other states to move their caucuses or primaries up in the campaign calendar was not good for the presidential nomination process.
"This whole presidential process is terrible for the country. You have much too early a decision cycle, you have everything jammed together," Gingrich said on NBC's "Today" show. "It gradually exhausts the candidates and overly focuses them on raising money."
The decision was the latest development in a historically early White House competition that has defied precedent in terms of jockeying for position, campaign debates, large campaign expenditures, broadcast advertisements and hundreds of candidate appearances.
The scheduling decision was eagerly awaited by the various presidential campaigns, which have been building huge organizational operations in the state as well as spending heavily on advertising.
Mark Daley, a spokesman forIowa campaign, said campaign strategists build a detailed timetable.
"It's good to know what the date is, because we build backwards from the caucus date," Daley said. "We've done some hypotheticals, but it's nice to have some finality."
Daley said most campaigns were less worried about the precise date than having one selected so planning could begin.
Dan Leistikow, who runscampaign in the state, agreed.
"I think that's true for all the candidates," he said. "It's good to have some finality in the process."
For decades, Iowa's precinct caucuses have marked the first major test of strength in the presidential nominating season, followed by New Hampshire, which holds the nation's first primary election.
That early position in the nominating calendar brings the two states enormous attention from presidential candidates, and gives them a heavy role in the selection of the nominees.
In this cycle, however, other states have sought to get a piece of the action even to the point of running afoul of their party establishments. They want the attention and increased influence that early balloting brings and feel they can do this by moving up in the campaign calendar.
Florida set its primary for Jan. 29, and Michigan is planning a Jan. 15 primary. Those decisions forced South Carolina to move up its date as well.
See the whole primary and caucus calendar.