Paul, R-Texas, told Hannity on Hannity's Fox News Channel show Monday night he would announce in Des Moines Tuesday he was "going to start an exploratory committee" to help determine whether he should run for president next year.
The committee's formation "might lead to the next decision," he said, alluding to a possible run.
"It depends on what kind of reception I get on your show tonight, you know?" he joked. "If I get booed, maybe I shouldn't do it."
Paul -- who ran for president as a Libertarian Party candidate in 1988 and as a candidate for the Republican nomination in 2008 -- plans to make the announcement at Des Moines hotel appearance Tuesday afternoon, his office said.
He will decide whether to launch a formal campaign "in mid-May," a Paul campaign source told CNN.
The announcement comes nine days before the first GOP presidential primary debate in South Carolina, set for May 5. Paul accepted an invitation but had to file as an exploratory or formal candidate by Friday to comply with debate guidelines.
Paul becomes the sixth man to declare an official intention to run for president as a Republican.
He joins former Massachusetts Gov. Mitt Romney, former Minnesota Gov. Tim Pawlenty, former Louisiana Gov. Buddy Roemer, former New Mexico Gov. Gary Johnson and former Godfather's Pizza Chief Executive Officer Herman Cain, who also established exploratory committees.
Paul gained notice in 2008 for his campaign's grassroots support and its appeal to young voters. Some 500 "Students for Ron Paul" groups were formed across the United States.
Paul wants to abolish the Federal Reserve system. He opposes the Iraq and Afghanistan wars and supports deep reductions in defense spending, his stated positions indicate.
He was one of four Republicans to vote against the House budget blueprint April 15.
Paul's "Hannity" announcement came hours after Mississippi Gov. Haley Barbour announced he was abandoning his effort to join the GOP presidential race, telling supporters he lacked the "absolute fire in the belly" a candidate needed.
Barbour -- who gained a national spotlight after Mississippi was hit by Hurricane Katrina in 2005 -- apologized for flirting with the idea for six months and then backing away. He said he was not ready to dedicate himself to the "all-consuming effort" a campaign would require.
"I cannot offer that with certainty, and total certainty is required," The New York Times quoted him as saying.
Barbour is a former lobbyist whose powerful Washington firm had "close ties to the Republican establishment," the Times said. His clients included tobacco companies, the pharmaceutical industry and several foreign governments.
Barbour's departure leaves former U.S. House Speaker Newt Gingrich of Georgia the only prospective presidential candidate from the South.