Nigeria's main opposition party has selected a former military ruler as its candidate in April's presidential poll.
The ANPP candidate lost to President Obasanjo in 2003
All Nigeria Peoples Party (ANPP) delegates met in Abuja, but six of the seven nominees stood aside to allow General Muhammadu Buhari to win.
The Action Congress opposition party, in a pact with the ANPP not to run rival candidates, meets on Wednesday.
On Sunday, Katsina state governor Umaru Yar'Adua was selected by the ruling party to contest the April 2007 poll.
Mr Yar'Adua will be viewed as favourite by many, having received support from outgoing President Olusegun Obasanjo, leader of the People's Democratic Party (PDP).
But if the ANPP and AC select a joint candidate they would present a formidable challenge.
In his acceptance speech, Gen Buhari - who lost to President Obasanjo in 2003 - promised to run an all-inclusive government if elected next April.
"We have the people, we have the support of Nigerians, we have the programmes. All we need by the grace of God is free and fair elections," Gen Buhari said.
Gen Buhari's claim that the 2003 presidential elections were rigged was rejected by the Supreme Court last year.
The political rivals are kinsmen from Nigeria's north-western state of Katsina and the ANPP is hoping that this factor might help split the northern Muslim vote in next year's polls.
The other main opposition party - the Action Congress party (AC) - is meeting on Wednesday in Nigeria's commercial capital, Lagos.
Vice-President Atiku Abubakar is expected to seek nomination as AC's presidential candidate.
Military ruler of Nigeria from 1984 to 1985
Deposed in a coup
Poor human rights record
Seen as incorruptible
Muslim from northern Nigeria
Mr Abubakar who was a key figure in the formation of the governing PDP was recently suspended following disagreements with Mr Obasanjo and allegations of corruption which he denies.
Last week, the ANPP and AC formed an electoral pact, agreeing not to run rival candidates against each other in an attempt to counter the formidable election machinery of the PDP.
Once the AC chooses their candidate, a committee is expected to agree on a consensus candidate.
Edwin Ume-Ezeoke, ANPP National Chairman told the BBC News website that the two parties agreed to back only one candidate or a joint candidate not only for the presidency but for other positions as well.
"But first, the two parties will conduct their own primaries through the normal processes and choose their candidates."
A BBC correspondent says there is little ideological difference between any of the main parties, which are mostly divided by personality and patronage.
But it seems almost certain that a northerner will win April's elections, a significant factor in a country split into a Muslim north and a largely Christian south.
Northerners say it is their turn to have the presidency after years of rule by Mr Obasanjo, a Christian.
A former college lecturer, Mr Yar'Adua is one of the few governors not currently under investigation for corruption.
He also has a close family link to Nigeria's leader - his brother was Mr Obasanjo's deputy when the president was military ruler during the 1970s. And the two men were in jail together during the rule of President Sani Abacha.
His running mate will be a southern Christian governor Goodluck Jonathan, from the oil-rich Niger Delta.
Presidential candidates for some 50 registered political parties are being announced by the end of the week.
Next year's polls should become the first transfer of power from one elected leader to another since independence in 1960.