The 64-year-old, whose annual quest for partners has netted several of the world's most famous women including Sophia Loren, Ivana Trump, Joan Collins and Grace Jones, said he would finance his candidature with his own money.
President Thomas Klestil's six-year term in office ends in 1998 and the elections are scheduled to be held in April next year.
Lugner, ridiculed in Austrian society as a flashy parvenu, said he would campaign as an "unpolitical person from the business world" and that he was not being supported by any political grouping.
He is nicknamed "moertel", meaning "concrete", which is meant to indicate the thickness of his skin and possibly his intellectual level. He regards this as a compliment and has even launched his own brand of Moertel beer.
His rivals complain that he will do anything for publicity and has been known to appear at other balls in drag.