The party informed the Election Commission of its decision on Saturday.
Municipal polls, scheduled for Dec 30, will be the first local elections in which candidates will contest with party symbols, as they do in parliamentary polls.
A joint meeting of the Awami League was held last week to select candidates.
The BNP, which stayed away from the last general elections, has also decided to contest the municipal polls.
Khaleda Zia has empowered Joint Secretary General Md Shahjahan to recommend candidates.
HM Ershad has reserved for himself the power to recommend Jatiya Party aspirants.
The EC has set Dec 3 as the deadline for submitting nominations for 236 municipalities.
Saturday was the last date for political parties to submit the names of those authorised by party leaders to recommend their party candidates.