Former European Parliament President Martin Schulz was nominated on Tuesday by Germany's centre-left Social Democrats (SPD) as their candidate to run against Angela Merkel for the post of chancellor in September's national election.
The nomination followed SPD leader Sigmar Gabriel's decision to stand aside for Schulz, a move that shows the SPD is serious about ending its role as a junior partner in Merkel's current right-left coalition.
Merkel has led Germany since 2005 and is Europe's most powerful leader, her grand coalition with the SPD has governed Germany since 2013.
Asked during a news conference at the SPD headquarters in Berlin to explain his decision to make way for Schulz, Gabriel said: "Because he has a better chance."
Opinion polls suggest Schulz may have a better chance than Gabriel, but still faces an extremely tough job to oust Merkel, whose conservatives lead the SPD in opinion polls by up to 15 percentage points.
The party is expected to confirm Schulz's candidacy as well as his leadership of the party at a meeting on Sunday.
"This country needs new leadership in these difficult times," Schulz said, warning that European societies were being torn apart by populism.
The SPD wants to form a coalition with smaller parties on the left, but most analysts still think another right-left coalition is the most likely outcome of September's election.
Senior SPD lawmaker Karl Lauterbach told broadcaster WDR: "This is a clear signal - no grand coalition. With Martin Schulz, we have a better chance."
However, his pro-European stance makes him vulnerable to attacks from the anti-immigrant and anti-euro Alternative for Germany (AfD)) which has made significant gains in the last two years, especially due to the refugee crisis.
"Symbol of EU bureaucracy and a deeply divided Europe as chancellor candidate?" tweeted AfD co-leader, Frauke Petry.