Mr Shah's announcement at a public meeting, barely days before the assembly polls scheduled for November 9, seems to be driven by the party's calculation that the 73-year-old leader remains its best bet to oust the Virbhadra Singh-led Congress government from the state.
Union minister J P Nadda was seen as another strong contender for the party's choice for the top post due to his perceived proximity to its central leadership, but Mr Dhumal's mass connect seemed to have tipped the scale in his favour.
"Virbharda Singh keeps asking us that under whose leadership the BJP is fighting the elections. In the whole country, the BJP is fighting under the leadership of Modiji. But if you want to hear under whose leadership the BJP is contesting in Himachal, then I want to make it clear today. Vibhadra ji, the BJP is going to fight under Dhumalji's leadership in Himachal. I want to say that we will fight these 2017 polls in the name of our senior leader Dhumalji. I also want to say that Dhumalji is currently a former chief minister and the leader of the opposition, but after December 18 he will become Himachal's chief minister," Mr Shah said.
The state poll results would be declared on December 18.
The BJP and the Congress were ruling the state alternately for close to three decades, and Mr Dhumal was at the helm for 10 years.
The BJP had kept people guessing as to whether it would name a chief ministerial candidate before the polls.
Often it did not name a candidate, as seen in Uttar Pradesh, Uttarakhand, Bihar, Maharashtra, Haryana and Jharkhand among others but it chose to name its choice in Assam, where it won, and Delhi, where it lost.