Takhar, who was elected to the provincial legislature in 2003, resigned as minister of government services on Thursday and said on Facebook that he's entering the contest.
His official campaign launch is scheduled for Saturday.
He will be replaced in that portfolio by Dwight Duncan, who will add it to his job as finance minister.
In a statement posted on his Facebook page, Takhar says he has spent several weeks consulting with people in Ontario to find out "what renewal means to them."
"In conversations with these grassroots Ontarians, it has become clear to me that the bulk of their concerns centre around their ability to provide opportunities for their families to succeed in these times of economic uncertainty," he said.
The others in the race are Kathleen Wynne, Glen Murray, Charles Sousa, Eric Hoskins, Sandra Pupatello and Gerard Kennedy.
The deadline for joining the leadership contest is at the end of Friday.
Premier McGuinty announced his resignation on Oct. 15.