Sharif stepped down on July 28 after the Supreme Court disqualified him for not disclosing his assets. After the verdict, Sharif ceased to be a member of parliament.
Initially, the ruling Pakistan Muslim League-Nawaz (PML- N) had decided that Sharif's younger brother Shehbaz Sharif would contest election from NA-120 in Lahore, vacated by Sharif, so that he could be appointed as prime minister.
But now it has been decided to let him continue as chief minister of Punjab to complete different developmental schemes.
"Begum sahiba (Kulsoom) is the natural choice to contest the polls on the seat vacated by Nawaz Sharif," he said.
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Maryam is the second choice and would be acceptable to the party as her father was grooming her for a role in politics.
He said that the final decision would be taken by Sharif in coming days.
Sharif had defeated Rashid with a huge margin in 2013.