Howard, the Tories' finance spokesman and a renowned eurosceptic, is favourite to succeed Iain Duncan Smith, a day after disgruntled Tory members of parliament ousted him.
"Michael will be announcing this afternoon that he intends to stand," shadow health secretary, Liam Fox, said on Thursday morning.
Howard, 62, is regarded as one of the Tories' really big hitters and unlike Duncan Smith, has cabinet experience as a former home secretary.
He is still remembered as a tough and uncompromising minister whose clarion call was "prison works".
The Sun, Britain's biggest-selling daily newspaper, hailed Howard as "Mister Right" as the Conservatives seek a leader capable of mounting an effective challenge to the governing Labour Party.
The Conservatives, who have spawned political titans such as Winston Churchill and Margaret Thatcher, have been defeated twice in succession by Labour and appear headed for a third drubbing in polls.
"He (Ian Duncan Smith) was simply too ineffectual, too weak on television, too devoid of charisma, to make a fist of opposition - let alone to unseat the government"
Duncan Smith was accused of being too ineffectual and failing to capitalise on Prime Minister Tony Blair's falling popularity in the wake of the Iraq war.
Weeks of speculation and backroom intrigue ended on Wednesday when the 165 Conservative members of the House of Commons voted 90-75 to reject Duncan Smith.
"The parliamentary party has spoken, the announcement has been made, and I will stand down as leader when a successor has been chosen," Duncan Smith said.
With his wife Betsy and other top Tories at his side, Duncan Smith regretted he now would not have a chance to become "the prime minister of the first Conservative government of the 21st century".
The Guardian newspaper said Duncan Smith had been targeted in an "assassination" and called him "the leader who was never meant to be".
He was "simply too ineffectual, too weak on television, too devoid of charisma, to make a fist of opposition - let alone to unseat the government," wrote its columnist Jonathan Freedland.
No sooner had Duncan Smith got the boot than other Conservatives raced to present the image of a united party, lest voters think that it was about to plunge into unseemly infighting.
David Davis, the shadow deputy prime minister, said he would not run, but backed Howard, while foreign affairs critic Michael Ancram announced on Wednesday he would not challenge Howard if he were the only leadership bidder.
Duncan Smith, a former British army officer and businessman with eurosceptic views and no experience in government, was a backbench MP when he won the leadership after the Tories' second straight election loss to Labour in 2001.
Margaret Thatcher was one of the
greatest Tory leaders
Speculation about his future haunted the Conservatives' annual conference in October, where the party unveiled a platform calling for tax cuts, better old age pensions, free university tuition and more police on the streets.
Blair and Labour have sagged in recent opinion polls - partly over the way in which the prime minister led Britain into the US-led war in Iraq and partly over rising local taxes and controversial health care reforms.
But Duncan Smith could not overtake Blair in the personal popularity stakes, while the Conservatives themselves languished in the 30% zone behind Labour, according to the respected MORI polling organisation.
The Conservatives have looked so weak that some analysts wonder if the Liberal Democrats, Britain's second opposition party, might even edge the Tories into third place in the next elections.