Renfrewshire Council said the bid was part of "far-reaching regeneration plans...to put the town on the map as a cultural and tourist destination".
Although Paisley does not have city status, the competition is open to large towns and urban areas.
The competition is run by the UK government's department of culture media and sport. To date, there has never been a Scottish winner.
Derry-Londonderry was the first city to host the title in 2013.
Hull will host the 2017 version, during which the 2021 winner will be announced.
Renfrewshire Council leader Mark Macmillan said Paisley would have a strong bid.
"For its size, Paisley's contribution to the world is absolutely massive and we have a list of assets to be proud of," he said.
"We have a globally-recognised brand bearing our name in the Paisley Pattern, as well as an outstanding collection of listed buildings as the physical legacy of our days at the centre of the world's textile industry.
"We also have an outstanding location and transport links, are home to a highly-regarded university, and have a thriving contemporary cultural scene, and all of that and more will feature in what we believe will be a strong bid."
Councillor Macmillan also acknowledged that Paisley had challenges - but said the bid would not hide from them.
"The UK City of Culture process is about building the economic and community capacity to face those challenges and make a far-reaching social impact," he said.
"Previous winners have been cities with a clear plan for how the title would help them boost their area and community - and when our bid is made in 2017 we will be ready to once again sell Paisley to the world."
Paisley is to bid to become UK City of Culture in 2021.