Former European Parliament chief Martin Schulz on Sunday will unveil his battle plan to challenge Chancellor Angela Merkel in Germany's general election in September, hoping a wave of popularity will help him shake up the race.

The former bookseller, who has spent the past two decades in Brussels, was catapulted to the frontline of German politics this week after the little-loved leader of the Social Democratic Party (SPD), Sigmar Gabriel, announced he was standing aside to make way for Schulz.

An ARD poll showed support for the SPD climbing from 20 to 23 percent, while Merkel's conservative CDU/CSU block lost two points, to 35 percent.

A separate poll by the same public broadcaster found that if voters could elect their chancellor directly, Schulz and Merkel would be neck-and-neck.

Merkel ultimately remains the favourite, but Schulz's candidacy turns up the heat in an election where she is under pressure from the rightwing populist AfD party, polling at around 14 percent.

Schulz, 61, is scheduled to be confirmed as the SPD's new leader in a party vote on Sunday.

He is also set to spell out his strategy in a speech that will be scrutinised for his domestic vision after years on the European stage.

In an interview with news weekly Der Spiegel on Saturday, Schulz said he was not running just so the SPD could stay on as junior partner in another Merkel-run coalition government.

"I want to be chancellor," he told the magazine.

"I have worked with Angela Merkel longer than almost anyone outside her party," he said. "I have studied her, got to know her."

Even before Schulz's candidacy Merkel had predicted that the coming election, in which she is seeking a fourth term, would be "more difficult than any before it".

Merkel's conservatives suffered a string of embarrassing defeats in regional polls last year, as the anti-immigrant AfD gained ground by railing against her liberal refugee policy that has seen over a million migrants arrive in the country since 2015.

But Merkel's approval ratings have bounced back more recently thanks to a slowdown in new arrivals.