The Democratic Union of French Muslims (UDMF) wants to tackle the under-representation of Muslims in French politics.
The group said on Thursday that it would put two candidates forward in the Paris suburb of Bobigny, where the party already succeeded in getting its candidate elected as a councillor last year.
It will also put forward candidates in seven other "départements" across the country which cover cities such as Marseille, Lyon and Nice.
The party's founder, Nagib Azergui, told French newspaper Le Parisien that he believed the party's values were compatible with French democracy, much in the same way that France's Christian Democratic Party manages to separate religion from politics.
His party's aim, he told the paper, is "to give a voice to the part of the population that can't be found in the traditional parties."
Azergui says he doesn't want France to be governed by Sharia Law and has no intention of "Islamizing" French society.
However the party does have some controversial policies that will not be welcome among French secularists, notably their wish to overturn France's ban on headscarves in schools and see an increased investment in the Halal food industry to help boost the economy.
The role of Islam in France is once again being debated in the aftermath of the Paris terror attacks, committed by three homegrown Muslim extremists. Since then there has been scores of anti-Islam attacks carried out on Muslim targets, such as mosques.
France has struggled to integrate its Muslim community, Europe's largest estimated at around five million, although figures are difficult to come by as secular France does not collate religious data.
The UDMF was founded in 2012 in order to provide Muslims "an alternative in France when it comes to economics, society, and politics", its official website says.
"In the media debate sparked by some intellectuals and political leaders, it is clearly insinuated that Islam is not compatible with democracy," reads the website.
"But living together, morality, deep respect for other communities, the importance of family, the elderly, solidarity, mutual aid, charity and fighting injustice are precisely the values that drive us."
The party is still small, with 900 members and around 8,000 supporters.
Coincidentally the announcement comes as a book by French author and polemicist Michel Houellebecq, which envisions a France ruled by a Muslim president, tops the bestseller rankings in France.
Houellebecq was blasted by critics for scaremongering, however he himself said it would make sense for there to be a Muslim political party in France because Muslims are seriously under represented.
News of UDMF's election push comes just days after France's Prime Minister Manuel Valls said that France had to do everything it could to fight the Muslim Brotherhood - an international Islamic organization that has been designated as a terrorist organization in several countries.
He said that France needed to help the members of the Muslim community who were being confused with jihadists and terrorists.
"A religion can not impose its views on our neighbourhoods," he told Le Parisien.