The Turkish presidency is a largely symbolic post, but Erdogan has said he favors a system that gives the president more powers.
He failed to muster sufficient support to make constitutional changes for an all-powerful president but has suggested that, if elected, he would fully use latent presidential powers, including the right to call Cabinet meetings. That would allow him to rule with as much authority as he has enjoyed as premier.
If Erdogan is voted president, his Justice and Development Party will appoint an interim prime minister who would serve until general elections in 2015. Turkey's main opposition party, however, called on Erdogan to step down as soon as his candidacy is formalized on July 8, arguing it would be unethical for Erdogan to use the benefits of being in office while campaigning.
In a speech immediately after his nomination, Erdogan said, if elected, he would continue to enlarge Turkey's economy, work to expand democracy and advance the country's bid to join the European Union. He also pledged to press ahead with peace efforts to end a 30-year conflict with the Kurdish rebels.
"I will be the president of all of the people, whether they vote for me or not," Erdogan said.
Erdogan's candidacy was announced by Mehmet Ali Sahin, a deputy chairman of the ruling party, who said the Turkish leader was unanimously nominated by all of the party's legislators.
The Turkish leader remains popular despite allegations of corruption that he says were orchestrated by followers of a moderate Islamic movement.
President Abdullah Gul, whose term ends Aug. 28, said Sunday that he would not seek re-election.
Two of Turkey's main opposition parties the secular Republican People's Party and the right-wing Nationalist Movement Party are fielding Ekmeleddin Ihsanoglu, the soft-spoken former head of the Organization of Islamic Cooperation, for the race.
A party championing Kurdish and other minority rights nominated Kurdish politician Selahattin Demirtas as its candidate on Monday.
It is the first time that Turks will vote directly for their president. Parliament chose presidents in the past. The two-round elections are set for Aug. 10 and 24.