Princess Ubolratana will run for the Thai Raksa Chart Party, an opposition group founded by the allies of former prime ministers Thaksin Shinawatra and his sister Yingluck, who was ousted in the coup.
But, Princess Ubolratana Rajakanya has been declared a candidate for a party loyal to Thaksin's side, something that could shake-up the traditional dynamic of Thai politics.
Thailand has been a constitutional monarchy since 1932 but the royal family has wielded great influence and commanding the devotion of millions.
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It dramatically redraws the kingdom's political landscape by giving a royal sheen to Thaksin Shinawatra's political machine, which has won every election since 2001.
Princess Ubolratana is the eldest child of the late King Bhumibol Adulyadej and sister of King Maha Vajiralongkorn.
A small pro-military party, the People's Reform Party, asked the Election Commission to consider whether the princess's candidacy violated laws forbidding parties from invoking the monarchy in campaigns.
The development raises questions about the future of other political candidates, amid speculation that no-one will run against a member of the royal family.
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"The Thai Raksa Chart Party is highly honoured by Princess Ubolratana's bid for the party's prime ministerial nomination", the party said in a statement.
But a royal prime minister could help end the protracted political conflict which has troubled Thailand for the past thirteen years, forcing a reconciliation between the competing factions that the military government failed to bring about.
The EC is required to endorse or reject all candidates by Feb 15, he said.
Thailand's Prime Minister Prayut Chan-o-cha later accepted the nomination. "I only want to work for the benefits of the country and the people", he added. While it does not technically apply to Ubolratana, who lost her highest royal titles when she married an American more than four decades ago, its scope has been widened in recent years to nearly anything that sullies the royal institution, making criticism of the princess highly problematical.
Ubolratana, 67, was born in Switzerland, but lived in the United States for 26 years, where she trained in biochemistry at Massachusetts Institute of Technology and earned a masters degree in public health from the University of California at Los Angeles. She is referred to as "Tunkramom Ying" meaning, "Daughter to the Queen Regent".
But she would not be covered by Thailand's strict lese majeste law against insulting the monarchy. She and Jensen had three children, Ploypailin Mahidol Jensen, Bhumi Jensen - her son who died in the 2004 Indian Ocean tsunami at the age of 21 - and Sirikitiya Mai Jensen.
An avid social media user, she recently posted videos eating street food and another complaining about pollution in Bangkok.