Rane is set to take on Trupti Sawant, wife of sitting MLA Bala Sawant whose death necessitated the byelection.
Announcing Rane's candidature, state unit Congress chief Ashok Chavan said that All India Congress Committee (AICC) General Secretary Mohan Prakash conveyed the party's decision to him telephonically.
However, anticipating that his nomination was apparent, Rane called on NCP chief Sharad Pawar at his residence here in the morning and sought NCP's cooperation in the bypoll slated for April 11.
Rane was made chief minister when Sena-led NDA government was in power in 1995. He was expelled from Sena in 2005, following which he joined Congress.
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"Parties like MIM, MNS and NCP are unlikely to cause trouble to Rane, while a section of BJP is of the view that the defeat of Shiv Sena in the by-election will help reduce its pressure on the state government," an observer said.
Rane's aggressiveness and his potential to take on the BJP and Sena in the Legislature seems to have weighed in his favour, he said.
In October last year, Bala Sawant of Shiv Sena had defeated BJP's Mahesh Parkar by 15,000 votes in the seat.
Meanwhile, RPI's Ramdas Athawale appealed to Congress to not field its nominee from the seat on "humanitarian" grounds.