The Afghan constitution bans current President Hamid Karzai from seeking another term as president. However his brother, Qayum Karzai, is expected to officially announce his candidacy within weeks, according to Reuters.
That pullout calls in line with the White House's plan to end the American war in Afghanistan by 2014.
But Sayyaf's candidacy, and deep Taliban ties, has stoked fears among Afghan and American leaders the terror group may be making inroads into the country's fragile central government.
Sayyaf has long been a top member of the Taliban's senior leadership, running mujaheddin training camps in Afghanistan in the mid-1980s.
He was also instrumental in bringing in al Qaeda chieftain Osama Bin Laden into Afghanistan in 1996, providing protection for the terror leader until the U.S. invasion of the country in 2001.
U.S. intelligence also identified Sayyaf as a key mentor to 9/11 mastermind Khalid Sheikh Mohammed.
The al Qaeda-linked terror group, Abu Sayyaf, based in the Southern Philippines was named in honor of Sayyaf.
However, Sayyaf maintains he has turned his back on the Taliban and claims his presidential bid is an attempt to unite the fractured country after over a decade of war.
"We are not here for personal benefits, or to gain fame. We are here to help heal the wounds of the suffering Afghan nation," Sayyaf told reporters.
"We will work for national unity, to tie up all the ethnic groups in this country," he added.
His nomination comes as Afghanistan and Pakistan are attempting to integrate Taliban leaders into the political process, as a possible path toward a peace deal with the terror group.
Last month, Pakistan announced the release Mullah Abdul Ghani Baradar, Afghan Taliban's No. 2 commander from custody.
Baradar has been in a Pakistani jail since his capture in the country in 2010.
Baradar's release is designed "to further facilitate the Afghan reconciliation process," according to a Sept. 20 statement from Pakistan's Foreign Ministry.
After the beginning of American operations in Afghanistan in 2001, Baradar was the main Taliban commander responsible for planning and coordinating attacks against U.S. and allied forces.
Baradar reported directly to Afghan Taliban chief Mullah Mohammed Omar and the Quetta Shura in Pakistan.
But prior to his capture three years ago, Baradar had reached out to the Karzai administration in an early attempt to to get peace talks underway.