Malawi's scandal-hit ex-president Joyce Banda has withdrawn her presidential bid and endorsed opposition front runner Lazarus Chakwera, the two candidates' parties announced on Thursday.

Banda, who served as president between 2012 and 2014 and was accused of abuse of office and money laundering during her term, had been set to run for the role again in elections in May.

"Malawi is bigger than individuals," a joint statement from Chakwera's Malawi Congress Party, the southern African country's second largest, and Banda's People's Party said.

"As such we all have to set aside individual aspirations and embrace the greater and common good."

Opinion polls had previously tipped the ruling Democratic Progressive Party of President Arthur Peter Mutharika to win, but he now faces strong opposition which could reduce his chances of an outright victory.

Banda garnered just over 1-million votes in the last election, which could be enough to tip the scales in Chakwera's favour based on his level of support in 2014.

Chakwera scored just under 1.5-million votes in that election, which Mutharika won with 1.9-million votes. However, while Banda has been trying to build her party, many still see her as discredited.

Banda proclaimed her return to politics last year after returning from a nearly four-year, self-imposed exile abroad.

She had left soon after losing her seat in 2014, following allegations that she was involved in a wide-ranging corruption scandal uncovered a year earlier in which senior government officials were accused of siphoning off millions of dollars in public money.

Banda denies the allegations. A warrant for her arrest was issued while she was abroad but it was never enforced upon her return, and no charges have been filed.