However, the court is still weighing five other petitions arguing that Musharraf's dual role as army chief and president is illegal and that he is ineligible to seek another five-year term.
Musharraf, who took power in 1999, has said he will step down from the army soon after the election if he wins, a move that has sparked protests by the opposition.
Separately from politicians, Pakistan's lawyers have opposed Musharraf since he suspended Iftikhar Muhammad Chaudhry, the country's chief justice, on March 9.
Chaudhry was later reinstated by the supreme court.
Munir Malik, the supreme court bar association president, said outside the court on Monday: "We have nominated Wajih-udin Ahmad, he is a very respected judge and he will be our candidate for president."
"Pakistan needs a military leader who can control both civil and possible military extremism"
Creative_person01, Islamabad, Pakistan
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He said Ahmad would be proposed and seconded by other lawyers, but did not disclose who they were.
Ahmad would likely file his nomination papers on Thursday, the deadline for doing so, he said.
On Sunday, police arrested more than a dozen opposition leaders, saying they want to prevent further protests against Musharraf's re-election.
Officers started arresting political figures on Saturday night and continued into Sunday, taking 14 people in total.
The United States embassy in Pakistan on Sunday called the arrests "extremely disturbing" and urged authorities to release the opposition figures.
The expression of concern is a rare step from Washington, which normally limits criticism of Pakistan, a key ally in the so-called war on terrorism.
The embassy statement said the US wanted Pakistan to succeed as a "moderate, modern democratic country led by the choice of the Pakistani people."
"We do not endorse particular candidates or parties."
Most of those taken belong to the party led by Nawaz Sharif, the exiled former prime minister.