Mr Swales ousted Labour’s Vera Baird at the 2010 election with the biggest swing in the country.
He will now try and defend the seat again next year after being selected at the January meeting of Redcar Constituency Liberal Democrats.
In Parliament, Mr Swales is currently Lib Dem Treasury Spokesman and has been Chair of the All Party Parliamentary Group for the Chemical Industry.
He is also the only trained accountant on the influential Public Accounts Committee.
Redcar Liberal Democrats chairman Josh Mason said: “Ian is a local man with exactly the experience of industry and business we need to get our area back on its feet.
"He’s made a huge impact since being elected in 2010. We’re very lucky to have him.”
Mr Swales said: “I’m delighted the Liberal Democrats have put their faith in me to represent them again at the next general election.
"After decades of decline - with falling employment and failing industry over successive Labour and Tory Governments - there’s no quick fix for our local economy.
"But things are definitely starting to improve here – manufacturing is increasing all the time and unemployment is at its lowest level since 2009.
"I hope to be able to continue the fight we’ve started to bring jobs and prosperity back to our area.”
Labour have chosen Anna Turley as their candidate to try to regain the seat.
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