Mr Sisi made the widely expected announcement on state television last night.
He led the overthrow of President Mohammed Morsi last July following mass opposition protests against the former leader.
Political analysts have already said they believe he will win the presidential poll as a result of his popularity in Egypt and a 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”.
Mr Sisi, 59, said he was “responding to a call from the people”, and had “humbly” decided to bow to their will.
Since the removal of Mr Morsi the military-backed interim government has waged a fierce crackdown on his Muslim Brotherhood, arresting thousands of members and killing hundreds of protesters in clashes.
At the same time, militants have waged a campaign of attacks on police and the military, and Mr Sisi has repeatedly declared a war on terrorism.
In his address, he gave a campaign-style speech, promising to build a “modern and democratic Egypt”. He spoke of the challenges facing the country, including millions of unemployed and a “weak economy”.
He also pledged 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.
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. In an apparent goodwill gesture despite the crackdown, he promised “no exclusion. I extend my hand to all at home and abroad – all those who have not been convicted”.
“There will be no personal score-settling,” he said.
However, on the ground there have been no signs of a move toward reconciliation with Mr Morsi’s supporters and the Brotherhood, once the country’s strongest political force.
Authorities yesterday announced the latest in a series of mass trials of suspected Islamists, including the main leader of the Brotherhood, Mohammed Badie, on murder and other charges connected to the violence of recent months.
Morsi supporters have continued near daily protests against Mr Sisi and the interim government. Yesterday students clashed with security forces. An 18-year-old student was killed in the violence at Cairo University, the Health Ministry said.
Mr Sisi graduated from Egypt’s Military Academy in 1977 and underwent further training in UK and US.