Kulsoom Nawaz Sharif will stand as the Pakistan Muslim League-Nawaz party’s candidate in the by-election next month, an adviser for the former PM told reporters.
The announcement comes as Mr Sharif leads a “homecoming” caravan to Lahore, which has drawn thousands of supporters.
He described his removal last month over unreported income as “an insult to the mandate of 200 million voters”.
The Supreme Court verdict marked a political victory for opposition leader Imran Khan, a former cricket star who led a campaign demanding Mr Sharif’s wealth be investigated.
Mr Khan is himself facing a court case over alleged undeclared assets.
The decision to put forward Mrs Sharif is in line with Pakistan’s tradition of dynastic politics and also indicates the former PM will likely stay involved behind the scenes.
Mr Sharif’s ruling party has already elected one of his loyalists, Shahid Khaqan Abbasi, as Prime Minister.
Senior party figures have suggested Mr Abbasi will hold office until elections due next year, a reversal of earlier indications that Mr Sharif’s younger brother Shahbaz would seek the vacant seat and later take over as PM.
There is also talk in the party that Mrs Sharif herself could become PM if she is elected, but a Sharif aide said it was too early to speculate.
Mrs Sharif, who has not previously run for office, will be canvassing in the family’s political stronghold inside Lahore’s Walled City, where Mr Sharif has never lost.
She has stood by her husband during a political career that has seen him elected and then ousted as PM three times.
When army chief General Pervez Musharraf removed Mr Sharif in a military coup in 2000, Mrs Sharif led protests in Lahore.
In one of the demonstrations she locked herself in a car for several hours, refusing to let police arrest her.
Officers had to tow the car and then lift it with a crane to drive miles back to her home.