The ANC will pick a new leader at a conference in December and, given its national dominance since coming to power at the end of apartheid in 1994, the winner is likely to go on to be South Africa's next president when elections are held in 2019.
Dlamini-Zuma, the chairwoman of the African Union, is viewed as a frontrunner. She is a Zulu, the largest tribe in South Africa, and is expected to have the backing of her former husband, who will have a major say in who succeeds him.
The Women's League's endorsement is the first for a specific candidate by a national section of the ANC and will intensify the debate over who will take the party forward after it suffered its worst local election results last year.
Dlamini-Zuma was regarded as a capable technocrat during her time as South Africa's minister of home affairs between 2009 and 2012 and has since gained international exposure during her time as the first female head of the AU.
However, critics of Dlamini-Zuma, a medical doctor trained in South Africa and Britain, say she should have done more to intervene when former president Thabo Mbeki denied that HIV causes AIDs and imposed anti-scientific policies.
Mbeki's stance has been blamed by health activists for more than 300,000 preventable deaths. Dlamini-Zuma was foreign minister in Mbeki's cabinet and one of his closest allies.
Vice President Cyril Ramaphosa, a unionist-turned-business tycoon, is viewed as her most likely rival after powerful trade unions endorsed him last year.
Neither Dlamini-Zuma, 67, or Ramaphosa, 64, have declared their intention to run.
Ramaphosa, who was once touted as a successor to Nelson Mandela, would be the first choice for many investors because his background in commerce suggests he will support more pro-business policies than many in the traditionally left-wing ANC.
However, he will face criticism from opponents for his role at platinum producer Lonmin where he was a director and shareholder when violence led to police shooting dead 34 striking miners in 2012. An investigation has cleared him of wrongdoing.
The Women's League has a block of votes at the party conference and are a critical lobbying group for the ANC, particularly in galvanising support among female voters."After careful consideration and opening our eyes as wide as possible, Nkosazana Dlamini-Zuma is the only suitable candidate," the Women's League said in a statement.
"Her legacy and influence is known and well documented throughout the history pages of the republic and beyond."
Many South Africans believe it is time the ANC had a female leader, a rarity on a continent with strong patriarchal heritage. Zuma has previously said that South Africa is ready for a female president.
This Article has been cross-posted from Reuters News