Prokhorov, who briefly led the center-right 'Just Cause' political party earlier this year, made his announcement at a news conference in the capital of Moscow. "I have taken a decision, maybe the most serious one in my entire life," he said. "I will run for the presidency."
The businessman, who is 46, is considered to be Russia's third richest billionaire with a net worth of approximately $18 billion. He made his fortune in metals and banking, but he is also well known as the owner of the New Jersey Nets, which he bought in 2009.
In an interview with the Itar-Tass news agency, Prokhorov said he and his supporters have 'built a structure' to collect the two million signatures which are needed to have his name registered for the presidential elections. "It will not be an easy process," he said.
Prokhorov, who is expected to run as an independent, said he decided to run for president because the new parliament elected earlier this month is "absolutely leftist" and has made 'unrealized promises.' "When I obtain registration [as a presidential candidate], I will publish my program, and those who share my views will be my supporters," he said, as quoted by Itar-Tass.
The announcement comes just two days after tens of thousands of Russians staged anti-government protests across the country to criticize the recent elections which they claim were rigged in favor of Vladimir Putin's governing United Russia party. The political party won more votes than any of the other three parties, but it still suffered a significant drop from the two-thirds constitutional majority it has enjoyed for the past four years.
In Moscow, thousands of protesters waved banners and chanted slogans to demand the resignation of election commission chief Vladimir Churov and other officials such as Putin himself. Police estimated that around 25,000 people participated in the rally in Moscow alone, although organizers said the number was closer to 40,000.
Prokhorov's announcement is believed to be the largest threat yet to incumbent Prime Minister Vladimir Putin, who in September announced he would run for a third term as president. If Putin is elected, incumbent President Dmitry Medvedev is expected to become prime minister, effectively switching places.
Putin first became acting president in December 1999 until he was elected for his first full term which began in May 2000. He won re-election in March 2004 and continued to serve in the country's highest office at the Kremlin until May 2008 when term limits prevented him from running for a third consecutive presidential term.
Days before the end of Putin's second term as president, he undertook a series of controversial steps to increase the power of the prime minister. Medvedev had been widely expected to serve only one term so Putin could again become president after a short break.