Kejriwal, who failed to win a seat in the national parliament, admitted he had made a mistake in quitting as Delhi chief minister to contest the general election on a mission to clean up graft-ridden politics.
After meeting his state legislators in the capital, Kejriwal said they had decided to seek another Delhi state election to try to win a majority and return to power there.
"We made a mistake by quitting earlier and we apologise for that," Kejriwal told reporters.
"We told them to get ready for the elections. We will go to the people in the city and tell them about the situation and also seek their forgiveness."
Kejriwal's Aam Aadmi Party (AAP) stunned the major parties last December in the Delhi state election in its debut electoral outing.
Riding a wave of voter anger over endemic corruption in government and everyday life, it won 28 seats and formed a state government with support from the Congress party which won eight.
But Kejriwal quit as chief minister just 49 days later when Congress and the Bharatiya Janata Party (BJP) blocked his efforts to set up an anti-corruption commission.
Kejriwal shrugged off claims at the time that he was walking away from the tough job of governing the capital, saying he wanted to take on Congress and the BJP at national level.
But the AAP managed just four seats at the national election, which saw the BJP trounce Congress. Kejriwal also lost his personal battle against BJP leader Narendra Modi in the high-profile seat of Varanasi.
Modi is set to be sworn in as prime minister on Monday.
Local media said Kejriwal had been trying in recent days to reform government in Delhi state, which has been under the rule of the city's lieutenant-governor since his own shock resignation.
But after Kejriwal met the governor on Tuesday, Congress ruled out extending further support to the AAP - which it needs to pass state legislation.
The governor could now dissolve the assembly, which has been suspended since Kejriwal's resignation, forcing the fresh elections.
Kejriwal said there are now "no possibilities to make a government and we should be ready to fight elections again".
Analysts say he would face a battle in any new Delhi election, because of a "tsunami" of support for the BJP.
The campaigner also faced criticism for "anarchist" actions while he was chief minister, including sleeping overnight on a pavement in the capital to press for police reform.
COMMENTS (6)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@Ch. Allah Daad: Agree. Also addicted to being in the spitlight.
Everything about this party, including its name and party symbol is nothing but a joke, and a very crude joke.
"Anti corruption activist seeks fresh poll." And then two hours latter he lands in tihar jail for refusing to pay bond of rs10,000 mandatory for defamation case filed by politician he blamed to be corrupt without proofs. This is how mercurial he is. One second he says something another he does something totally unexpected. Total threat to stable democracy more of mobocracy.
Joker of Indian politics.
don't worry arvind we will make u again Delhi CM and give you vigorous training how to be neta