Senator Gleisi Hoffmann, head of the leftist Workers Party (PT) that Lula founded, made the announcement in the southern city of Curitiba, where Lula has been jailed on corruption charges since April.
Lula had stepped aside to allow running mate Fernando Haddad to stand for the presidency, Hoffman said. A letter from the ex-president was read out to supporters who have been keeping vigil outside the federal police headquarters where Lula - who maintains his innocence - is being held.
“A man can be unjustly imprisoned, but not his ideas,” Lula wrote in the letter, read aloud by founding PT member Luiz Eduardo Greenhalgh. “We are millions of Lulas and from today Fernando Haddad will be Lula for millions of Brazilians.”
Lula, serving a 12-year sentence for a graft conviction, was president from 2003-2010. He is ineligible for office under Brazil's “Clean Slate” law, which prohibits candidates from running if they have convictions that have been upheld on appeal.
Support for Haddad, a 55-year-old former mayor of Sao Paulo, is rising, according to opinion polls released this week, but he does not have the national name recognition of Lula and still lags his rivals.
The polls, which also showed support for other leftist candidates increasing, sent Brazil's currency and stocks down.
Haddad will need all the political power that Lula's backing can offer to make it into a likely runoff vote, which would take place between the top two finishers in the Oct. 7 first round ballot if none wins a majority.
Haddad's running mate is Manuela D'Avila, 37, a member of the Communist Party of Brazil
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