The New Right party had failed to garner enough votes in April to win seats in parliament, but announced on Sunday it's running again.
Party co-founder Naftali Bennett said he's stepping aside for Shaked.
Shaked seeks to unify religious nationalist parties under her leadership to form a "significant power" in the next government, she said.
Both Bennett and Shaked were ministers in the previous government of Prime Minister Binyamin Netanyahu, who was unable to muster a governing coalition in April's vote.
The two former ministers had split from their religious-nationalist Jewish Home party and sought greater power by appealing to new secular voters, but the maneuver backfired.
Who is Ayelet Shaked?
A pugnacious, secular woman once in the Jewish Home party, Shaked is known for her extreme, ultranationalist views.
Born in Tel Aviv to a Likud-voting Iraqi father and politically left-wing Ashkenazi mother, Shaked served as an instructor in the Israeli armys' Golani Brigade, where she first became interested in right-wing politics.
She established a right wing extra-parliamentary 'movement for Zionist activity' called My Israel with Bennett, who is also a vocal opponent of a Palestinian state.
As a Knesset member, Shaked also campaigned against illegal immigration from Africa to Israel, saying that it poses a threat to the state.
Shaked made headlines following a Facebook post on June 30 2014, where she likened Palestinians to "snakes" and said all Palestinians should be "eliminated".
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