Known as the Iron Lady of Manipur, Mr Sharmila has spent most of the last 16 years under judicial custody in a hospital and has been force-fed through a tube inserted into her nose.
Ms Sharmila had not eaten voluntarily since November 5, 2000, when she began fasting to protest an Indian law that suspends human rights protections in conflict areas, including her northeastern state of Manipur, which has long been plagued by uprisings by ethnic separatist militants and violent government crackdowns.
She had been charged with attempting suicide, a crime in India, allowing officials to force feed her.
Ms Sharmila, 44, began her hunger strike after 10 civilians were killed in Manipur by soldiers who enjoy wide powers to search, enter property, and shoot on sight.
They can do so under a colonial-era law that is still in existence in parts of India.
“She will start eating on August 9 and change the entire strategy of her protest,” said Babloo Loitongbam, a fellow activist and close associate of Ms Sharmila.
Yesterday, Ms Sharmila met reporters outside court premises, where she is required to report regularly and announced her plans to contest local elections from Imphal, Manipur’s capital city.
Her decision to end her protest against the Armed Forces Special Powers Act comes at a time when the federal government has asked its forces to exercise restraint in responding to protests in disputed Kashmir, a northern state where the army has shoot-to-kill powers to fight militants.
At least 46 people have been killed, and more than 5,000 wounded, including security forces, since protests erupted after the killing of a commander of Kashmiri separatist group, Hizbul Mujahideen, on July 8, in Kashmir.
Despite calls from judicial authorities and human rights groups, the federal government has kept in force the anti-terror law in parts of northeast India and mainly-Muslim Kashmir, so as to contain insurgencies.
Ms Sharmila’s hunger strike has won her worldwide recognition, with Amnesty International describing her as a prisoner of conscience.
“Sharmila will fight the battle to free the state from the clutches of the army on the streets of Manipur,” said Mr Loitongbam.
Abhirr VP of Amnesty International India said the fast was “a testament to her passion for human rights”.
“The government arrested her, confined her to a hospital room, and force-fed her for 16 years, seemingly to break her will," he said.
“There was zero dialogue. A peaceful protest was criminalised.”