The Nationalist Party chose Han Kuo-yu to run against incumbent Tsai Ing-wen in the January election. He defeated former Foxconn Technology chairman Terry Gou in a party primary.
Han was supported by 45% of respondents in telephone opinion surveys over the past week, the party said. Gou was second with 28%. Three other candidates also sought the nomination.
Han has vowed to make peace with China. In March he signed deals with four Chinese cities to sell 5.2 billion New Taiwan dollars ($165 million) worth of Taiwanese agricultural products.
He was elected mayor in November of the port city of Kaohsiung, normally a ruling-party stronghold, on pledges to improve the local economy.
Tsai's ruling Democratic Progressive Party suffered a major setback in the November local elections amid voter dissatisfaction with her management of the economy.
She has since rebounded in popularity ratings by taking a tough stance against China, which has ratcheted up pressure on the self-governing island to reunite with the mainland.
China and Taiwan separated during civil war in 1949, but Beijing still claims sovereignty over the island and occasionally threatens to use force to take it if necessary.
Gou's candidacy attracted interest in overseas business circles, as Foxconn churns out iPhones and other consumer electronics as a contract manufacturer for Apple and other brands.
He founded Foxconn Technology 45 years ago and built it by investing heavily in factories around China to tap into the vast, cheap labor pool there. Gou stepped down as company chairman in June to run in the primary.