Ferrandez is in his second mandate as mayor of the Plateau-Mont-Royal borough.
At the announcement, Ferrandez criticized Montreal Mayor Denis Coderre for mismanaging city finances, and said he wants to see better relations between boroughs and the city.
He also said he'd like to see demerged municipalities, such as Westmount, join the city once again.
During the announcement on Monday morning, former leader Richard Bergeron said he's run for mayor three times and the years have worn on him.
"Projet Montréal was founded ten years ago and you can't imagine how proud I am of the party that it has become .. After running for mayor three times, I feel the weight of the years. It's time to give the reins of the party to someone new," Bergeron said.
Ferrandez said he will only stay as party leader for six months, until the party picks a new leader.