He made the widely expected announcement on state television.
Mr Sisi led the overthrow of President Mohammed Morsi in July following mass opposition protests.
Correspondents say he is likely to win the presidential poll, given his popularity and the lack of any serious rivals.
In his address, Mr Sisi told Egyptians he was "appearing in front of you for the last time in military uniform", before warning that the country was "threatened by terrorists" and saying he would work to make an Egypt "free of fear".
He also promised to tackle the country's growing economic problems, but said he could not "perform miracles" and called on Egyptians to work hard to improve their country.
Mr Sisi, 59, who said he first wore military uniform as a 15-year-old cadet in 1970, said he had "humbly" decided to bow to the will of the people.
Sounding a similar note earlier this month, he was quoted by state media saying he could "not turn his back on calls by the majority of Egyptians" for him to run for president.
To his supporters, the former army chief is a saviour who can end the political turmoil dogging Egypt since a popular uprising ended Hosni Mubarak's three decades of one-man rule in 2011.
Tens of thousands of his supporters have taken to the streets to urge him to stand.
But his opponents hold him responsible for what human rights groups say are widespread abuses, and fear that he wants a return to authoritarianism.
His announcement came hours after Egypt's interim authorities ordered the prosecution of 919 suspected Islamists and days after 528 Islamists were sentenced to death in a separate case.
If Abdul Fattah al-Sisi becomes president, he will be the latest in a line of Egyptian rulers drawn from the military; a line only briefly broken during Islamist President Mohamed Morsi's year in office.
The starting date of the nomination process for the presidential election will reportedly be announced on Sunday, after which no changes may be made to the electoral roll.
The government has yet to set a date for the vote, although earlier this month al-Ahram newspaper cited interim President Adly Mansour as saying that it would be completed by 17 July.
Leftist politician Hamdeen Sabahi, who came third in the 2012 election, is the only other candidate to have declared his intention to run.
Gen Sedki Sobhi, the current chief-of-staff of the armed forces, is expected to be named the new commander-in-chief and defence minister.
From BEN Latest News: www.benlatestnews.com
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