Deputy Premier Steven Miles was considered the frontrunner to take over, declaring his nomination for the top job soon after the outgoing premier personally endorsed him on Sunday.
However, he faces competition after Ms Fentiman - the health minister - on Monday confirmed she would contest the Labor leadership.
"Now is the time for renewal and that means we may have to do some things differently," Ms Fentiman told reporters.
"I believe I am best placed to lead that change, and so will be nominating to be the next premier of this great state."
Ms Palaszczuk endorsed Mr Miles during her tearful resignation on Sunday, and praised Treasurer Cameron Dick who has also been linked to a leadership tilt.
However, she did not mention Ms Fentiman who has enjoyed an eight-year tenure as a Labor MP.
Outgoing Queensland Premier Annastacia Palaszczuk endorsed her deputy to take over. (Jono Searle/AAP PHOTOS)
Ms Fentiman described Ms Palaszczuk as a "Labor giant" and an inspiration for women before detailing her agenda, highlighting youth crime, housing, hospital workers and Olympic infrastructure transparency.
"A government with fresh ideas and energy, one anchored in Labor values with robust cabinet processes - that's the kind of government I want to show Queensland in the year ahead," she said.
"The next election is going to be tough, but I am the right person to lead us."
Labor's administrative committee is to meet on Monday night to formally open leadership nominations.
Caucus will gather on Friday to endorse its new parliamentary leader ahead of the October 2024 election.
Mr Miles is believed to have support from the biggest group in Labor's dominant left, the United Workers Union.
But Ms Fentiman said she wouldn't be stepping up if she didn't have "significant support", adding that she would back whoever wins the leadership vote.
Deputy Premier Steven Miles now faces a challenge to become the next Queensland leader. (Jono Searle/AAP PHOTOS)
A contested leadership ballot could drag on for weeks. Under party rules, it would be split between elected MPs, rank and file members and affiliated unions.
Mr Miles fronted the media on Monday but was coy when quizzed at a Tropical Cyclone Jasper update.
"My focus today is absolutely 100 per cent on the safety of Queenslanders on making sure we are adequately prepared for the cyclone," he said.
"So I hope you understand, I'm not going to let this press conference be sidetracked.
"You all know my position. I issued a statement yesterday. I said that I wanted to be the premier of the state."
Ms Palaszczuk - Australia's longest-serving sitting premier - backed Mr Miles on Sunday, said it was time for renewal after almost nine years as premier and 12 as party leader.
Standing alongside and standing up for the people of QLD as Labor's Premier has been the honour of my life.— Annastacia Palaszczuk (@AnnastaciaMP) I've always drawn my strength from the people of QLD, working to make our state fairer and more prosperous for the future.I have given it my all. Thank you Queensland. pic.twitter.com/MooH27SJvWDecember 10, 2023
The premier is set to meet with Queensland Governor Jeannette Young on Friday to officially tender her resignation.
If a replacement is sorted out by the Labor caucus, that person will also attend and be sworn in as the state's 40th premier.
Ms Palaszczuk went from an opposition with seven seats to claiming the 2015 election in one of the great political upsets and went on to become the first woman to lead a party to three state election victories.
She will also depart her Inala seat at the end of the month, prompting a by-election.
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