Heller said he had been preparing for an ugly primary fight against Ensign, who dropped out because he said he wanted to protect his family from attacks involving an extramarital affair.
"It's the worst kept secret in Nevada," Heller said of his senatorial ambitions. "But it's official now."
Heller is the first major candidate to enter the race.
Ensign's retirement means Heller will likely face a smoother primary, if he draws any credible challengers at all. Potential rivals include GOP and tea party favorite Sharron Angle, who lost her bid against Senate Majority Leader Harry Reid last year, and U.S. Rep. Shelley Berkley, a Las Vegas Democrat.
Heller's staff released an internal poll last month that claimed he would trump any candidate in a primary election tussle for the Senate. Heller said the survey was merely a snapshot in time, not a guarantee that his Senate bid would be a cakewalk.
"Twenty months is a long campaign and a lot can change," he said.
Still, Heller acknowledged, "I wouldn't get in this race if I didn't think I could win."
Ensign was once considered a potential 2012 presidential contender, or at the very least, a sure lock for re-election. That was before he announced last year that he had an extramarital affair with a campaign staffer who was also his best friend's wife.
Ensign's fall was a ripe opportunity for Heller, a former Nevada secretary of state who was easily re-elected in his rural Republican district in 2008 and 2010.
Senate Democrats were ready to pounce within minutes of Heller's announcement. They singled out his recent votes to save federal dollars by eliminating job-training centers and to revive Nevada's nuclear waste program at Yucca Mountain.
"Congressman Heller's decision to cut jobs in Nevada may make sense to the Republican establishment in Washington, but it is not Nevada common sense," said Democratic Senatorial Campaign Communications Director Matt Canter in a statement.
Heller has been critical of the Yucca Mountain project slammed by most Nevada politicians and Democratic leaders in Washington, but he also has a history of voting with his party.
Fueled by expectations that Heller would lobby to replace Ensign, Democrats have been preparing their attack for weeks. Soon after Ensign's announcement that he wouldn't run, Guy Cecil, executive director of the Democratic Senatorial Campaign Committee, assessed Heller's chances.
"Though Heller is perceived as a formidable candidate, a close examination of his Nevada vote performance reveals his support is a mile wide and an inch deep," Cecil said in a memorandum to reporters last week.
Nevada general elections can be hard fought, with GOP candidates forced to appeal to a conservative, tea party-like crowd of primary voters before embracing the state's divided electorate statewide.
"I think I have positioned myself well for a primary," Heller said.
Berkley recently said she would not be rushed into a decision, but Heller's announcement will likely pressure her to make up her mind. Other Democrats, including Secretary of State Ross Miller and Attorney General Catherine Cortez Masto, have been waiting for Berkley to take action or bow out, so they can test their national ambitions.
Berkley's campaign manager, Renee Aschoff, said the congresswoman is polling Nevadans but plans to stay in her re-election race for now.
Democratic lawyer Byron Georgiou recently entered the Senate campaign, but he does not share the same high profile as Berkley, Miller, Masto or Heller.
Angle has been coy about her intentions as she travels the nation, visiting early primary states New Hampshire, Iowa and South Carolina in what could be a fundraising tour. She did not respond to a request for comment.
Angle and Heller faced off in 2006 in an open primary for his northern Nevada congressional seat. He won by nearly 500 votes.
Republicans said bypassing a competitive primary would better position the GOP to add a new conservative voice to the Senate, where Democrats retain the majority. Party leaders also want to avoid the kind of ugly primary battle that made Angle the GOP Senate nominee in 2010 over establishment candidate Sue Lowden, a former chairwoman of the Nevada Republican Party.
Angle's loss was considered a failed opportunity by many Republicans who had hoped to give Reid the boot in an electoral year that favored the GOP.
"We've seen what a chaotic Republican primary leads to -- Democratic victory," said Lt. Gov. Brian Krolicki, a Heller supporter.
It's unclear whether Heller would be able to woo Angle's tea party base.
Chris Chocola, president of the Club for Growth, a national conservative group that has helped Angle in the past, would not immediately support a plan to give Heller the Republican nomination.
"We are interested in learning what she wants to do," Chocola said.
Heller announced his campaign in an e-mail to supporters titled "Why I'm Running," saying he wants to curb government spending and heal Nevada's troubled economy. The Silver State has the highest unemployment rate in the nation at 14.2 percent.
Heller also slammed President Barack Obama and "his beltway allies."
"We cannot ignore our nation's very serious fiscal problems and continue to allow Obama's big government job killing agenda to continue," Heller said in the e-mail.
Heller's Senate campaign website urged supporters Tuesday to sign a petition for a balanced federal budget.
National Republican Congressional Committee Chairman Pete Sessions said Heller has done a fine job in Congress.
"Grounded in Nevada interests, Dean Heller is a dedicated public servant whose service in Congress has centered on Silver State resources and opportunities," Sessions said in a statement.
Heller's Senate race also paves the way for Nevada's most competitive congressional election ever.
Record growth earned Nevada a fourth congressional seat in 2012. If Heller and Berkley both aim for the Senate, there could be three open House seats. Rep. Joe Heck, a newly-elected Republican, is expected to seek a second term.
Krolicki said he is now weighing a congressional run. Angle and others could also be drawn to the House races.