Saying "old school politics should be overhauled," Ahn announced his decision at a news conference in Seoul, Yonhap news agency reported.
He joins Park Geun-hye of the ruling Saenuri Party and Moon Jae-in of the Democratic United Party, who are virtually tied in polls. The election will be held Dec. 19.
Ahn repeatedly avoided questions about whether he would team with Moon for a single candidacy, saying "debate on selecting a single opposition candidate is inappropriate at this point."
Polls have shown that Park would likely win a three-way race.
Ahn, 50, founded AhnLab, the largest anti-virus software company in South Korea. He is also dean of the Graduate School of Convergence Science and Technology at Seoul National University. He has never run for public office.
If elected, Ahn said he would sell his remaining shares in the software company. He sold half his shares early this year and set up a charity.