Just hours after she was registered as a candidate, another political party supporting Prayuth filed an objection with the election commission, arguing the action broke rules banning the use of the royal institution as part of a political campaign.
The announcement means a royal-fronted party tied to the Shinawatras will directly take on the military party, whose own candidate was also announced Friday as junta leader Prayut Chan-O-Cha.
Her candidacy instantly threatened to upend the first national ballot since a military coup in 2014 that ousted a government loyal to Mr Thaksin, the figure at the centre of years of political turbulence and rival street protests that have riven Thai society.
But in practical terms, she today enjoys all, or most, of the same privileges as her siblings - except she is expected to be subservient to her younger brother, the king.
Thailand is a constitutional monarchy and has not had a royal run for frontline office since 1932.
Soon after Friday's announcement, her catchphrase #SongPhraSlender (Long Live Slender) was number one on Twitter in Thailand.
"Involvement of a high-ranking member of the royal family in politics, in whatever way, is an act that conflicts with the country's traditions, customs, and culture, and therefore is considered extremely inappropriate", he said.
But the monarchy could now be seen as effectively aligned with Thaksin's populist political movement, and if Ubolratana is to become prime minister, it could also pave a path forward for the return of the Thaksin family to Thailand.
The move by Princess Ubolratana Mahidol breaks a long-held Thai tradition of keeping the royal family independent from politics.
In a day of high political drama, Prayut declared his candidacy for premier moments after the princess.
Thailand's King Vajiralongkorn has denounced as "inappropriate" his sister's unprecedented bid to run for prime minister in March's election.
"I would like to say once again that I want to see Thailand moving forward, being admirable and acceptable by worldwide countries, want to see all Thais have rights, a chance, good living, happiness to all", she said, concluding with "#ILoveYou".More news: OR governor says Virginia’s Northam should resign
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Ubolratana Rajaka, Princess of Thailand, attends "Thailand Hub of Entertainment", a film and entertainment industry event for investors, in Hong Kong March 24, 2010.
Most political observers agree that Thaksin aggressively pursued good relations with the current king and friendship with the princess herself.
"This is a senior royal member, the sister of the king, so this is unprecedented in Thai politics", said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Chulalongkorn University in Bangkok.
Years of political infighting have eroded Thailand's competitiveness as a manufacturing base in South-east Asia, and economic growth is set to slow this year as the US-China trade war hits global demand. She posted an Instagram message yesterday that she was a commoner with the freedom and rights of an ordinary people to decide to be the candidate for Thai Raksa Chart.
It may well be that Ubolratana, a former actress, singer and activist, was encouraged to enter politics by her brother, who is using her as a weapon in consolidating his formidable power in the country, but it is nearly certain that Thaksin played a major role in the decision.
"I am not aiming to extending my power but I am doing this for the benefit for the country and the people", he said.
But the couple divorced and she moved back to Thailand where she is still considered part of the royal family.
The princess engages actively in social media and has also starred in several Thai movies.
"I am deeply touched", Ubolratana posted on Instagram. Deadly violence and disruption linked to the two groups has defined Thailand's turbulent last decade.
Her 21-year-old son was killed in the Indian Ocean tsunami in 2004 while vacationing on a Thai island.
A telecom tycoon who entered politics in the 1990s, Thaksin won the support of millions of rural Thais with expanded welfare programs, but opponents accused him of graft and challenging the power of the monarchy. The party is closely allied to Thaksin Shinawatra and his sister, Yingluck Shinawatra, both former prime ministers ousted in military coups in 2006 and 2014 respectively, the latter led by Prayut.