The date is earlier than expected, as Venezuela's presidential polls are usually held in December.
President Hugo Chavez has said he will seek another term to continue his left-wing "revolution", despite undergoing treatment for cancer.
The main opposition coalition will choose a candidate to stand against him in a primary on 12 February.
Mr Chavez immediately expressed his confidence that he would win a third six-year term.
He wrote on Twitter: "7 October 2012: your destiny is written! We will write another revolutionary victory on your page! We will live and we will conquer!"
The left-wing leader, who has governed Venezuela since 1999, has said he wants to serve at least two more terms, which would take him through until 2025.
Mr Chavez, 57, says he is now convalescing after having surgery for cancer in June and subsequent chemotherapy, but the exact nature and extent of his illness has not been made public.
Speaking before the election date was announced, he promised an energetic campaign despite his ill health.
"You won't see Chavez hiding," he said.
"You'll see a recuperated Chavez touring the country as a candidate, touring the streets at a rhythm set by circumstances."
Challengers As well as giving Mr Chavez time to recuperate, the October election date gives the opposition Table of Democratic Unity (MUD) plenty of time to campaign.
The favourites to win the opposition nomination in February's primary are the governor of Miranda state, Henrique Capriles Radonski, and the governor of Zulia state, Pablo Perez.
Opposition leaders have welcomed the announcement of the election date, while expressing concern at the long transition period it will leave before the start of the next presidential term in February 2013.
"This election date, two months earlier than is traditional, has an advantage in that we now have a date," MUD executive secretary Ramon Guillermo Aveledo said.
"But the disadvantage is that it extends the lapse between the presidential election and the taking of office," he added.
The opposition alliance says Venezuelans have had enough of what they say is Mr Chavez's poor economic management and dictatorial style.
They are also hoping that dissatisfaction with high crime rates, inflation and electricity shortages will boost their support.
But Mr Chavez still has strong support, particularly among the poor who have benefited most from his socialist policies, which have seen Venezuela's oil riches spent on services including health and education.
Mr Chavez's personal charisma and promise of revolutionary change have helped him secure repeated election victories since he first won the presidency in 1999.
Parliamentary elections last year showed Venezuelan voters evenly divided between support for Mr Chavez's socialists and the opposition.