"I request all the nation, civil servants, bureaucrats and police to rebel against this illegal government," Khan told his supporters.
The cricketer-turned-politician asked officials to ignore all illegal orders from the PMN-L party-led government.
"I am prepared to die fighting for the freedom for my people," he said, adding, "allah ya azaadi ya maut (either freedom or death)".
His comments came hours after police baton-charged hundreds of anti-government protesters led by Khan and Canada-based fiery cleric Tahir-ul-Qadri who marched towards Sharif's residence in the high-security 'Red Zone' here demanding his resignation.
The clashes started after Pakistan Tehrik-e-Insaf (PTI) chairman Khan and Pakistan Awami Tehrik (PAT) chief Qadri ordered their supporters to shift the protest venue in the front of the residence of Prime Minister Sharif to force him to quit.
Police fired tear gas shells and rubber bullets to disperse the protesters outside the prime minister's official residence and the adjacent parliament building.
Hundreds of protesters entered the lawn of parliament but they were pushed back at the main entrance of the building where army was deployed.
About 450 injured were brought to Polyclinic and Pakistan Institute of Medical Sciences, the two premier state-run hospitals, a government official said.
A police official said over 70 policemen and five Frontier Constabulary personnel were injured in clashes with protesters armed with sticks, catapults and stones.
Qadri' PAT in is twitter account claimed that seven of its supporters were killed in police action, but figures could not be verified officially.
Khan said yesterday government could use force against protesters as they were not prepared for it.
"We are ready now. Government cannot function," he said, adding, "We will remain here until we take resignations from Nawaz Sharif and Shahbaz Sharif," he said.
He said his party would file a FIR against Sharif and Interior Minister Chaudhry Nisar Khan for killing people.
Khan defended the protests saying that they were marching peacefully.
"Nawaz Sharif is a fascist and does not believe in democracy...In democracy, peaceful protest is our right," he said, adding, "Those who say we shouldn't have done this do not know the difference between freedom and slavery".
So far the protesters failed to break into the security cordon and reach the Prime Minister House.
PTI leader Pervaiz Khattak said that they will not stop until Sharif resigns, as the protest entered 18th day.
Qadri also emerged from his container and addressed the supporters in husky voice which he said was due to effect tear gas. "I salute my sons and daughters who won today," he said without explaining.
He promised to make another speech later on and vowed to continue to struggle till final victory of "revolution".
Fearing backlash from protesters, roads leading to Prime Minister Sharif's Lahore residence, where he is currently residing, have been blocked and heavy contingent of police deployed. His brother and Punjab Chief Minister Shahbaz Sharif is also living there.
Sharif hadleft the prime minister house in Islamabad for his Lahore residence, which is sprawling on acres of land, on Fridayalong with his personal staff.
"Sharif had vacated the prime minister house fearing it might come undersiege from the protesters," a source in the ruling PML-N told PTI.
"Sharif will not move to the prime minister house in Islamabad till thepolice manage to clear the area from Khan's Pakistan Tahreek-i-Insaf and Qadri's Pakistan Awami Tahreek," the source said, adding Sharif and his family members would not travel by road in thepresent circumstances.
Information Minister Pervaiz Rashid said that protesters had committed a crime by attacking parliament which is a "symbol of democracy".
Intermittent clashes are continuing and fresh contingents of police were sent this morning as reinforcement.
The situation was very tense in the capital as a number of demonstrators refused to budge from the protest site.
Both the leaders are agitating since August 14 against alleged rigging during the last year general elections.
A late night government announcement categorically ruled out Sharif's resignation and there is no threat to his life.
Meanwhile, the protesters clashed with police at famous Liberty Chowk and the Mall Road in Lahore. Half a dozen protesters suffered injuries and were shifted to hospitalwhere their condition is stated to be out of danger.
A group of Khan's supporters gathered outsidethe residence of Defense Minister Khawaja Asif in Sialkot, some 150 km from Lahore, and pelted stones at it.
Police, however, managed to disperse them.
In Multan, some 350 km from Lahore, the Tehrik-e-Insaf activists blocked the motorway road for several hours. Police used baton to disperse them.
Opposition leaders have criticised both Khan and Qadri for inciting violence.