Melanie Joly, who also helped organize Justin Trudeau's campaign for Liberal party leadership in 2013, will seek the nomination for the Montreal riding of Ahuntsic-Cartierville.
"The Liberal party represents my values and I want to be part of the solution," Joly said in a statement released Tuesday.
Her ties to the federal Liberals had sparked months of rumours she was planning a run for the party.
She said she wants to make Montreal a priority at the federal level, fight climate change and social inequality.
Joly burst onto the municipal political scene with a solid showing while running for mayor.
The lawyer and former communications firm executive, Joly finished a surprise second behind Mayor Denis Coderre, a former Liberal MP and cabinet minister.
She left the municipal party she helped found last year for the private sector, but always maintained she was interested in returning to politics.
The rumours surrounding Joly led five other candidates also seeking the nomination to release a statement last week urging the Liberals not to consider her as the preferred candidate and to "respect the democratic process."
Trudeau maintains his party wants open nomination races across the country, but Liberals have been accused several times of meddling in the process to help secure victories for preferred candidates.
The Liberal leader said Tuesday in Ottawa that Joly is a "woman of ideas, of convictions. I've known her for a long time and I have enormous respect for her."
Trudeau added that "it will be the citizens of Ahuntsic" who will choose the riding's candidate.
Joly would be a high-profile candidate for the party in Quebec, where the party is trying to regain seats.
If she wins the nomination, Joly will be pitted against star New Democrat candidate Maria Mourani.
The criminologist and former Bloc MP was acclaimed as the NPD candidate in January, but still sits as an Independent and isn't part of the NDP caucus.