Jack McConnell has declared an attempt to bring the Commonwealth Games to Scotland "up and running".
It is felt the Commonwealth Games would help regenerate Glasgow
The first minister announced the Scottish Executive's support for a bid to host the games in Glasgow in 2014.
It follows a positive report on the city's chances by David MacKay, former chairman of Scottish Rugby Union.
Consultants said it will cost more than £200m to stage the event. Cities in Canada, South Africa and Nigeria are also expected to bid for the games.
Glasgow hopes a successful bid will leave a legacy of sporting facilities and help regenerate the east end.
Speaking at Hampden Park, one of the proposed venues, the first minister said: "Taking the bold step to bring one of the largest events in the world to Scotland shows the scale of our ambition as a nation and the confidence that we have in our biggest city.
"I hope this decision will inspire thousands of Scots to take up the challenge of sport.
He added: "The competition to host the games may well be fierce, but with the support of everyone in Scotland, this is a race that we can win."
The city hosted the Special Olympics last month and is currently staging the Commonwealth Boxing Championships. Golf's Ryder Cup will be played in Scotland in 2014.
Glasgow has played host to the Champions League Final
Scottish National Party Holyrood leader Nicola Sturgeon welcomed the move, which she said had 100% support from the party.
She said: "The health benefits alone of getting more children interested in and involved in sports is clear to see.
"This is a huge opportunity for the city and Scotland must be seized with both hands."
Ms Sturgeon called for full financial and political support for the project.
Scottish Conservatives leader, David McLetchie, said: "It would be a fantastic sporting double for Britain if this bid was to be successful on the back of London's winning bid for the 2012 Olympics.
"To help turn this dream into reality, I hope that the bid team seeks the advice of Seb Coe, who won the Olympics for Britain.
"Scotland got right behind the London 2012 bid and I hope that Glasgow 2014 will be the only UK candidate, thus allowing all of Britain to give it the same support."
Mr McLetchie added that, if successful, he hoped there would be an opportunity for the National Lottery to play a part in raising the funds needed to stage the games, just as it was doing for London 2012.
The Lord Provost of Glasgow, Liz Cameron, said: "The Commonwealth Games will provide a legacy of sporting facilities for the current generation of young people and for future generations too."
Councillor Steven Purcell said: "Glasgow and Scotland are truly going for gold with this bid. The social and economic dividend of the games will bring great benefits and provide a lasting legacy for the city and nation."
Graham Stringer led Manchester's successful bid for the last Commonwealth Games.
He told BBC Radio's Good Morning Scotland programme: "We helped regenerate a very poor part of the city in east Manchester by holding the Commonwealth Games and you can still see the benefits now."
But he added: "You still need to ensure that the Scottish Executive are willing to put some money in - in the end the British Government had to put some money into the Manchester games, which we had got them to commit to before the games were awarded to Manchester."
Hampden Park: Opening and closing ceremony, athletics, rugby sevens
Tollcross Park Leisure Centre: Swimming
SECC: Various events, including netball
Kelvingrove Park: Lawn bowls
New National Indoor Sports Arena in the east end
Kelvin Hall, Strathclyde Park, Glasgow Green: Various events
Commonwealth Village: Dalmarnock and Sighthill
The BBC's Sports News Correspondent Gordon Farquhar said: "Although there are rules and guidelines about just how nasty the bids are allowed to be about each other, basically they're not allowed to be critical at all, but a great deal of spinning goes on in the background and private briefings."
Chris Broadbent from Scottish Athletics believes the games would be a massive boost for sport and that Scotland could make them success.
He said: "I don't think Scotland would be bidding if we didn't have a realistic hope of hosting the games.
Manchester used the games to boost the city
"Scotland's proved it can host some great sporting events in the last few years, with the European Cup Final and things like the Open Golf Championship, so I've got every faith Scotland can bring a very promising bid here."
The Scottish Executive has tasted sporting disappointment in the past when it failed in its backing of a joint bid with the Republic of Ireland to attract the 2008 European football championships.
Organisers of the bid said Scotland should have gone it alone on that occasion.