The former BBC war correspondent, who promised to stand down from his Tatton seat after one term, said he would run against Conservative social security spokesman Eric Pickles in Brentwood and Ongar in Essex.
Mr Pickles held the seat with a 9,690 majority, making it the Tories' sixth safest in the country.
" It will be a blast of fresh air for the constituency "
Mr Bell, who led a successful "anti-sleaze" campaign against disgraced Tory Neil Hamilton in 1997, has turned his focus on Brentwood and Ongar after claims that the local Tory Party is undemocratic.
He said members of the charismatic Peniel Pentecostal Church had infiltrated the local Conservative Association in an organised and systematic way, voting members into key posts.
"This is against the rules of any political party and is known as entryism," he said.
He said the "democratic deficit" that had taken place had prompted people from a range of political backgrounds to write to him with their concerns for what many called "a distressed constituency".
The church, which promotes its reputation as a centre for "miracle" healing, has denied the allegations of deliberately infiltrating the association. An investigation by Conservative Central Office found no evidence of wrongdoing.
Mr Pickles has also dismissed suggestions that the church dominated the local Tory party.
Mr Bell said he regretted not standing again in Tatton but was keeping his promise to stay for one term despite calls from a vast majority for him to stay.
The battle for Brentwood is expected to be a harder campaign to win than the one he fought in Tatton.
In 1997, Labour and the Liberal Democrats withdrew their candidates - but they are not prepared to do the same in Brentwood and Ongar.
But Mr Bell said people were in for a different style of politics.
"For the first time in a lifetime the election here will not be a procession but a real democratic contest," he said.
"This campaign is going to be different, this is not going to be politics as usual."
The Bell campaign will be launched at a news conference on Tuesday, with the help of Mr Bell's daughter Melissa, who helped him in Tatton.
Mr Bell said his £9,000 campaign fund would rely on donations from members of the public - but with a limit of £100 per person.
"One of my great concerns about public life is that party funding opens the way to corruption," he said.
But he said the donation limit had worked in Tatton, where he was forced to return two cheques for £4,000.
Mr Pickles, who first won Brentwood and Ongar in 1992, said Mr Bell's decision to stand seemed extraordinary.
"In all honesty he doesn't believe that he's got a hope," he said.
"He admits that I am not tainted with sleaze and this row over the church is a very local thing and it's about 31 members of the local Conservative Party."
Former boxer Frank Bruno had expressed interest in standing as a Tory candidate for Brentwood against Mr Bell, and had even devised the campaign slogan "Don't be a plank - vote for Frank".
But he told the BBC's On Side programme in March that the potential £50,000 cost of running a campaign had put him off the idea.