Mikola Statkevich challenged Lukashenko in a presidential election in 2010 but was jailed afterwards and only freed five years later to appease Western powers.
The Central Election Commission cited his criminal record when rejecting his attempt to be nominated as a candidate.
"Lukashenko is afraid of me because I am a prominent figure and will go all the way," the 63-year-old told AFP.
"I wanted to show that this is not an election but a circus."
Seven of his allies were arrested in the capital Minsk on Tuesday, Statkevich said.
The country, an ally of Russia, will hold a presidential election on August 9 despite the coronavirus epidemic.
Lukashenko, a 65-year-old former collective farm director, has led the country of nine million people since 1994, winning five elections.
He has confirmed he will contest this one and suggested he could also stand in 2025, although he added: "I won't cling on to my seat with my cold dead hands."
The opposition has criticised the decision to stage an election in August, saying the campaign will coincide with the height of the coronavirus epidemic.
Lukashenko has repeatedly claimed the coronavirus is no worse than other winter bugs.
Belarus has now recorded more than 31,500 cases of the coronavirus and 175 deaths.