Ahmad was expelled from the party five years back. He had unsuccessfully contested the Lok Sabha polls in 2009 on Apna Dal ticket from Pratapgarh in the state.
His selection replaces Shakeel Ahmad, who was previously announced as the party's candidate.
The re-entry of Ateeq Ahmad is being seen in political circles "as the end of the honest and clean politics credo" propagated by Chief Minister Akhilesh Yadav in the run up to the 2012 state assembly polls when the party denied ticket to mafia don turned politician D.P. Yadav.
"It is more evident now that the SP has realized that it will fare badly in the 2014 polls and wants to piggy back on criminals to shore up its sagging fortunes," Vijay Bahadur Pathak, state spokesman of the Bharatiya Janata Party (BJP) said.
The Samajwadi Party also denied that Ateeq Ahmad was a criminal.
Party spokesman and Prison Minister Rajendra Chowdhary said that so far no charge had been proved against Ahmad.
"No charge has been proved in the court of law against Ateeq (Ahmad). His entry will strengthen the party," he said. Police records, however, show Ahmad in different light.
The Gangster Act was slapped on him in 1986, but the first case against him was filed by police when he was barely 19.
There are now 117 cases against him. Among other charges, the SP candidate from Sultanpur faces serious charges like murder, attempt to kill, land grabbing, extortion and rioting.
Police officials say his 'gang' has more than 140 members.
Politically, however, his re-entry into the SP fold is being seen through the prism of minority vote bank and party's desperate attempt to hold on to the fast loosing grip on Muslims.
"The party hopes to gain from Ateeq Ahmad both in terms of muscle power and Muslim votes," a senior SP leader said.