After a lengthy preliminary investigation, police said that the allegations against Basuki Tjahaja Purnama, who is also a member of Indonesia's ethnic Chinese minority, should go to trial.
Religious groups in the world's most populous Muslim-majority country had demanded that Purnama, known by his nickname Ahok, be prosecuted for allegedly insulting the Koran while campaigning in elections for the Jakarta governorship.
The governor had accused his opponents of using a Koranic verse, which suggests Muslims should not choose non-Muslims as leaders, in order to trick people into voting against him.
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The blasphemy claims sparked much anger among Muslims -- both moderate and hardline -- and over 100,000 protesters took to the streets in Jakarta on November 4 demanding that Purnama be prosecuted, with the protest turning violent as night fell.
After a weeks-long investigation which involved questioning scores of witnesses, national police chief detective Ari Dono told reporters: "Basuki Tjahaja Purnama has been named suspect."
"We have reached an agreement, even though it was not unanimous... that this case should be processed in an open trial," he added.
Purnama will not be arrested but police ordered him not to leave the country.
Naming someone a suspect is a formal step in the Indonesian legal system that means authorities believe they have enough preliminary evidence to consider filing charges against someone.
If found guilty Purnama -- who is favourite to win the February elections against two Muslim opponents -- could be jailed for up to five years.
The protest earlier this month, which was the biggest in recent years in Indonesia, was peaceful during the day but as night fell descended into chaos, with protesters torching police cars and hurling rocks in in the heart of Jakarta.
Scores of police officers were injured and one man died in the clashes close to the presidential palace.
Purnama has apologised for his remarks made in September, saying he was criticising his political rivals who were using the verse rather than the Koran itself. But this has done little to appease his opponents.
