And his plan is to build a "fairer Germany" as he promised to “make the elections this year a real thrill" ahead of his resignation as a member of the EU parliament next week.
Mr Schulz, who earned £227,000 plus allowances and pension as EU president for five years, came to the end of his term two weeks ago.
The 61-year-old won the nomination to run for the Germany chancellery after the Social Democrats leader Sigmar Gabriel stood down.
Angela Merkel and Martin Schulz talk with British PM Theresa May
I have the ambition to become the next chancellor of the Federal Republic of Germany
Mr Schulz said he is looking at the historic work of 1960s Chancellor Willy Brandt, 1980's leader Helmut Schmidt who ran the country for eight years and turn of the century leader Gerhard Schröder who “were good for Germany.”
It comes as he previously declared that he wanted to derail the Brexit vote despite it being a UK majority referendum result.
The announcement that he is to run for president comes as Christian Democratic leader Angela Merkel is facing her lowest polls in five years and the far-right AfD is on the rise using increasingly hostile rhetoric.
Mr Schulz addressed a packed audience at the Willy-Brandt-Haus museum in Berlin as he appeared confident his party could triumph against head winds.
Angela Merkel and Martin Schulz are set to go to election war
Mr Schulz said: "Our party, the SPD, has the ambition to become the strongest political force in the next election.
"And I have the ambition to become the next chancellor of the Federal Republic of Germany."
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Germany will go to the polls to vote in their Bundestag, the federal parliament of Germany, on September 24, 2017.
Mr Schulz surprised voters by announcing he was to take on Merkel
However, these elections are set to be a test for Mrs Merkel who is running as leader against a furious backlash in the country over her disastrous migrant policy.
The Christian Democratic leader has been scolded for the terror attacks that have plagued the country as well as widespread sexual assaults on women.
However, rather than resign she has instead announced her intention to run for another term against the odds stacking against her.
'MERKEL MUST GO': Brussels protest against German Chancellor
Thu, January 12, 2017
Angry campaigners held placards with slogans reading 'Merkel not welcomed' and 'Merkel must go' following a spate of terror attacks against Germany.
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Protest on the sidelines of Angela Merkel's official visit in Brussels
Last week, Björn Höcke of the Alternative for Germany (AfD) party pledged to rewrite the history books insisting Germany was the victim of a "war crime" during the Second World War.
And he said, ahead of a party summit on Europe, that the country has been made to look “lousy and ridiculous” following the war.
Mr Höcke made the controversial comments in a speech to a cheering audience in a Dresden beer hall on Tuesday night.
He added that country's national Holocaust memorial was a “monument of shame”.