The decision was taken at a meeting of party's Parliamentary Board here.
Party president Rajnath Singh made the announcement at press conference and said the decision was unanimous and that Goel also consented to it.
Singh was flanked by several senior leaders including veteran L K Advani, senior leaders Sushma Swaraj, Arun Jaitley, Ananth Kumar and Delhi Election in-charge Nitin Gadkari.
Goel and Vardhan were also both present at the press conference.
The party expects that by presenting Vardhan, a former Health Minister who has a clean image, as the Chief Ministerial candidate it will be able to put up a tough fight to dethrone the Congress dispensation which has been in power for the last 15 years.
The decision by the party has come despite stiff opposition to Vardhan's candidature by Goel.
The internal squabbles in Delhi BJP over the issue had threatened to take its toll on the party's campaign.
