We present the first relativistic calculations of the final phase of inspiral of a binary system consisting of two stars built predominantely of strange quark matter (strange quark stars). We study the precoalescing stage within the Isenberg-Wilson-Mathews approximation of general relativity using a multidomain spectral method. A hydrodynamical treatment is performed under the assumption that the flow is either rigidly rotating or irrotational, taking into account the finite density at the

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... ar surface -- a distinctive feature with respect to the neutron star case. The gravitational-radiation driven evolution of the binary system is approximated by a sequence of quasi-equilibrium configurations at fixed baryon number and decreasing separation. We find that the innermost stable circular orbit (ISCO) is given by an orbital instability both for synchronized and irrotational systems. This constrasts with neutron stars for which the ISCO is given by the mass-shedding limit in the irrotational case. The gravitational wave frequency at the ISCO, which marks the end of the inspiral phase, is found to be 1400 Hz for two irrotational 1.35 Msol strange stars and for the MIT bag model of strange matter with massless quarks and a bag constant B=60 MeV/fm^3. Detailed comparisons with binary neutrons star models, as well as with third order Post-Newtonian point-mass binaries are given.