"I wanted to help build a team behind Boris Johnson so that a politician who argued for leaving the European Union could lead us to a better future," said Gove.
"I have come, reluctantly, to the conclusion that Boris cannot provide the leadership or build the team for the task ahead. I have, therefore, decided to put my name forward for the leadership," he said in a statement.
The announcement is a hammer blow to the former London mayor, who is expected to announce his candidacy later Thursday.
Brexit due to 'decades' of British blame: EU official
Gove was tipped as a potential finance minister in a Johnson government, but the momentum has now swung sharply towards interior minister Theresa May, who announced her candidacy Thursday.
"I have repeatedly said that I do not want to be prime minister. That has always been my view. But events since last Thursday have weighed heavily with me," explained Gove.
The former education minister said that Thursday's sensational vote to leave the EU showed Britons wanted to "restore democratic control of immigration policy and to spend their money on national priorities such as health, education and science instead of giving it to Brussels.
"They rejected politics as usual and government as usual. They want and need a new approach to running this country," he added.
Gove is among several candidates expected to run for the top job, who will be whittled down to a final two by the party's MPs.
The party's 150,000 members will then elect the leader with the result to be announced on September 9.
Members currently favour May over Johnson by a margin of 37 percent to 27 percent, according to a YouGov poll published Thursday.
David Cameron says Brexit vote must be accepted, timing up to Britain
The justice minister was a close friend of Cameron's and his decision to defy him and campaign for a Brexit was a blow to the prime minister.
The 48-year-old former journalist presented the more sober, cerebral face of the "Leave" campaign.
His low point was comparing economic experts warning about the effects of a Brexit to the Nazis who smeared Albert Einstein in the 1930s, for which he later apologised.
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