The Democrat immediately becomes his party's strongest candidate with $4 million in his Senate campaign fund that he can transfer to a governor's race fund. White, a wealthy attorney, chipped in more than $1 million himself.
"I'll be a Governor who challenges Texans to lead, not leave, the United States," White said in a statement, wasting no time in swiping at Gov. Rick Perry's comments earlier this year that Texas could secede from the Union.
He had hinted at the switch two weeks ago when said he would consider a gubernatorial run after Tom Schieffer, the leading Democratic contender, pulled out. White said then that he wanted time to hear from Texas voters. Friday, he said his campaign has received thousands of e-mails urging him to run.
White announced his bid to several hundred supporters who barely filled half of a ballroom at a downtown Houston hotel. His appearance came during a rare Houston snowstorm. Background music ranged from the Christmas carol "Let It Snow" to "Play That Funky Music, White Boy."
White is term-limited after serving three two-year terms as mayor of Texas' largest city. He leaves that office at the end of the month.
Schieffer, from Fort Worth, is a former state lawmaker who served as ambassador to Japan and Australia under former President George W. Bush. Schieffer also had business ties to Bush before joining the administration, and that connection turned off some Democrats.
That, combined with difficulty raising money, prompted Schieffer to withdraw, leaving wealthy Houston hair care executive Farouk Shami, rancher Hank Gilbert, teacher Felix Alvarado and possibly humorist Kinky Friedman in the March primary for the Democratic nomination.
White's Senate plans were scrambled after Republican incumbent Kay Bailey Hutchison last month backed off from resigning this year to run against Perry, a fellow Republican. Perry's 10 years on the job make him Texas' longest-serving governor.
Hutchison is still hoping to win the GOP gubernatorial nomination in March but has refused to quit her Senate job before then, insisting she's needed in Washington to oppose President Barack Obama's health care legislation and other Democratic initiatives.
"Kay Bailey Hutchison is the only candidate well positioned to defeat the Democrat nominee in November regardless of who that person is," Hutchison spokeswoman Jennifer Baker said. "She looks forward to debating the Democrat on important issues that matter to Texans like immigration, taxes, transportation and education."
White told the AP he anticipates a race against Perry if he wins the Democratic primary.
"When Sen. Hutchison said that she wouldn't resign to campaign full time, it looks as though Gov. Rick Perry will be their nominee," White said. "Texans deserve an alternative."
White served as a deputy secretary of energy under former President Bill Clinton. He resigned from the Clinton team in 1995 to become state Democratic chairman, made a fortune in private business, then embarked on the costliest mayoral race in Houston history in 2003. He was re-elected twice with large margins and received high marks for his response to Gulf Coast hurricanes, including national recognition for opening Houston to tens of thousands of people who fled New Orleans after Hurricane Katrina.
He's drawn criticism, however, for being too reluctant to crack down on illegal immigrants and being too eager to support Democratic efforts to limit carbon emissions.
"Bill White wants Texans to believe that he is a moderate Democrat, but that's not his record," Texas GOP chairwoman Cathie Adams said. "The fact is, Bill White is a liberal in moderate's clothing and his record proves it."
White has a difficult run ahead of him.
No Democrat has held the Texas governor's office since Ann Richards was ousted by Bush in 1994 after only one four-year term. Republicans now hold all statewide elected offices and have crushed Democrats by huge margins since the late 1990s. Big-city Texas mayors also have traditionally had difficulties winning office statewide.
"Texas is a state where people are pretty independent-minded, actually. We're not going to make this race about party or personality or who should be doing what in Washington," White said in a reference to the squabbling between Perry and Hutchison. "This race is going to be about the future of Texas, about how Texas can be the best state in the union."
White's Democratic primary opponents include Palestinian-born Shami, maker of the popular Chi flat iron hair tool, who has vowed to spend $10 million of his personal fortune in the race. Friedman collected 12 percent of the vote when he ran for governor in 2006 as an independent. Gilbert began his campaign in August with less than $10,000 raised.
White's departure from the Senate race would seem to clear the way for John Sharp, a former Texas comptroller, to seek his party's nomination for the seat Hutchison has said she plans to vacate.