"I have decided to once again be a candidate for the office of the federal presidency next year," Germany's largely ceremonial head of state said in Berlin.
The announcement comes less than a week after academic Gesine Schwan hinted she was interested in contesting the presidency for the Social Democrats.
A battle for the presidency between the Social Democrats and Merkel's Christian Democrats, who have ruled in an acrimonious left-right coalition since 2005, is expected to further strain ties ahead of legislative elections next year.
Schwan ran for president in 2004, but was easily defeated by Köhler, a former International Monetary Fund chief. His current term as head of state expires in May 2009.
The Social Democrats have yet to decide whether they will nominate a candidate for the largely ceremonial post.
Schwan ran for president against Köhler in 2004 but stood little chance because of the power balance in parliament at the time. The president is elected by delegates to both houses of the legislature.