Rick Snyder made the announcement Wednesday afternoon at a Lansing hospital, a day before he proposes his next state budget.
The federal health care law gives states the option to accept the expansion, refuse it or postpone a decision.
But there are benefits for states that choose to expand Medicaid. The federal government will pick up the entire cost in the first three years and 90 percent over the long haul.
Snyder is likely to run into resistance from Republican lawmakers opposed to the health law. They believe federal officials could renege.
Hospitals, doctors and others in favor of Medicaid expansion joined Snyder at his announcement.