Ubolratana, 67, the older sister of Vajiralongkorn, was announced hours earlier as a candidate in the upcoming elections for the Thai Raksa Chart party, which is steered by the divisive Shinawatra political clan.
Her candidacy instantly threatened to upend the first national ballot since a military coup in 2014 that ousted a government loyal to Mr Thaksin, the figure at the centre of years of political turbulence and rival street protests that have riven Thai society.
The general election this March will pit Thailand's royalist-military establishment against the populist movement - led by ousted Prime Minister Thaksin Shinawatra.
But the monarchy could now be seen as effectively aligned with Thaksin's populist political movement, and if Ubolratana is to become prime minister, it could also pave a path forward for the return of the Thaksin family to Thailand. DD News has been successfully discharging its responsibility to give balanced, fair and accurate news without sensationalizing as well as by carrying different shades of opinion.
Andrew MacGregor Marshall, a lecturer at Edinburgh Napier University who first broke the news on Wednesday on Facebook, called Ubolratana's candidacy a momentous development that would cause a dramatic realignment of Thai political forces. They settled in the United States, where they had three children.
Reuters could not independently confirm whether Princess Ubolratana's nomination had the approval of the palace.
It also potentially bridges the political divide between the "Red" shirted loyalists to Thaksin and the "Yellow" shirted royalist supporters, whose violent clashes have scarred Thailand's recent history. "Thai Raksa Chart is a leading contender now", Thitinan Pongsudhirak, a political analyst at Chulalongkorn University said.
Some initially viewed Ubolratana's entry as deft political strategy by Thaksin and a sign of a backroom deal to revive his political fortunes.
"It'll be hard for parties to run against the princess", said Paul Chambers, a lecturer at Naresuan University's College of ASEAN Community Studies in the country's north. "Voters would find it hard to choose someone that's not part of her party, because Thai ideology puts the royals at the top".
The Princess has had links with Thaksin in the past and, although still the sister of the current King of Thailand, will not be protected by any of the lese majeste rules that govern members of the Thai Royal Family.
After leaving the royal family to follow her heart nearly 50 years ago, the 67-year-old sister of current monarch King Maha Vajiralongkorn is again upending protocol by entering politics.
Thai Prime Minister Prayuth Chan-ocha is loyal to the junta.
Ubolratana, a popular and public-facing royal, relinquished her royal titles after marrying the American Peter Jensen in 1972.
She was given the title "Her Royal Highness, Chao Fa" (lady of the sky) before the family moved back to Thailand in December that year. "I believe there will be no legal problems in terms of her qualification, but we have to wait for the Election Commission to endorse her candidacy", he said.
"I am not aiming to extend my power but I am doing this for the benefit of the country and the people", he said.
She lived in the United States for years, though frequently visited her parents, the much-revered King Bhumibol, who died in 2016, and Queen Sirikit. Only after a bitter divorce did she move back permanently to Thailand in 2001.
In Thailand, she experienced tragedy, losing her autistic son Poom to the 2004 Asian tsunami.
Ubolratana is well-known among the Thai public, having appeared in movies, stage performances and maintaining an active, vibrant social media presence.
On her Instagram account, Ms Ubolratana recently posted videos of her enjoying street food and complaining about Bangkok's pollution.
Yet a small party that supports the junta later Friday submitted a letter to the Election Commission objecting to the nomination of the princess, saying it should be suspended as it could violate election law.