"I thought the country would not need me given the plans and goals of other candidates who are running … but I have decided to enter the election for a number of reasons," Rezai said in a statement carried by Mehr.
Rezai, a veteran conservative who headed the guards corps for 16 years to 1997, ran in the 2005 presidential election which saw hardline Mahmoud Ahmadinejad victorious but pulled out of the race a day before the election.
He said he felt compelled to run because Iran needs "a change in its management model."
"I feel alarmed by lost economic, social, political and cultural opportunities inside the country, in the region and the world," Rezai said in the statement.
"The country is threatened by unemployment, inflation, poverty and drugs, weakening of political ethics and emergence of disunity between the government and different ethnic groups and between Shiite and Sunni."
Ahmadinejad has faced mounting criticism from rival reformists and fellow conservatives mainly over his handling of the economy and soaring inflation which has topped 25 percent despite Iran's windfall oil revenues over the past years.
Rezai is the first conservative to challenge Ahmadinejad in the June 12 polls.
Other candidates include former parliament speaker and reformist cleric Mehdi Karroubi and former prime minister Mir Hossein Mousavi, also a reformist.
Ahmadinejad has set up a campaign team for the elections without yet formally announcing he will run.
