The Ard Comhairle of the INLA's politicial wing (the Irish Republican Socialist Party) gave 76 year-old Peggy O'Hara its backing during a meeting on Saturday.
Mrs O'Hara has told the 'Journal' that she is running as an abstentionist candidate in memory of her son, who died after 61 days on hunger strike in May 1981.
"We don't recognise the police then and we won't recognise them now. I decided to run because of what the police did to Patsy. When he was taken from Ballykelly to Long Kesh they burned his lovely face with cigarettes. That's why he had to grow a beard."
Mrs O'Hara said that her son would have been "very against" Sinn Fein's policing strategy and that her standing in any election this year would honour his memory.
"No-one has come to me and asked me what I think of the policing debate. I am standing in memory of Patsy," she said.
IRSP spokesman Martin McMonagle has described the grandmother as a "unifying force" for republicans in Derry.
"Peggy has the full backing of the IRSP and a wide range of republicans in Derry," he said.
He added that she had been "really hurt" by the recent moves by Sinn Fein towards the PSNI. Indeed, her announcement was made only hours after Sinn Fein confirmed that it will hold a special Ard Fheis on policing on January 28.
"We believe she is the best person to maximise the anti-Good Friday Agreement and anti-PSNI vote in Derry should an election take place. We are calling on all republicans to vote for her in protest at partition via the endorsement of the Good Friday Agreement and the PSNI," he said.
It's understood that Strabane community activist, Paul Gallagher, is also to contest any Assembly election this year. He was also given the green light by the IRSP's Ard Comhairle to contest an Assembly election in the West Tyrone constituency at last weekend's meeting.
Mr. Gallagher has contested Strabane District Council elections as an independent candidate on two occasions in the past.
Meeting tonight
Meanwhile, dissident republicans are to host a public meeting to discuss Sinn Fein's strategy on policing in the Tower Hotel tonight. The meeting - which will have speakers from the IRSP, the 32 County Soverignty Movement (the political wing of the Real IRA) and Independent republicans - will begin at 7.00 p.m.
A spokesman for the organisers said he was "hopeful" that Sinn Fein would send a representative.