The 61-year-old Qatari ended weeks of speculation about a possible bid to head world football's governing body by informing reporters of his decision at the Asian Football Confederation's (AFC) headquarters in Kuala Lumpur.
"After careful consideration I have decided to stand in the FIFA presidential elections on June 1 at the FIFA congress, " Bin Hammam announced to reporters.
"The AFC executive committee have encouraged me.
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"Change is necessary and needed in FIFA," Bin Hammam said.
"I have the wish and will to serve FIFA - I have always declared that competition is good."
Blatter, 75, who is seeking a fourth term as the head of FIFA, and Bin Hammam will stand in an election at the two-day FIFA Congress in Zurich starting on May 31.
Bin Hammam, who was sworn in unopposed for a third and final four-year term as AFC head in January, is hoping to become the ninth president of FIFA.
