US Senator Bernie Sanders formally launched his populist, liberal campaign for the White House, reiterating his pledges to recalibrate an American economic system which created sharp disparities between rich and poor.

Sanders, who had said last month he planned to stand in the election, told a launch event in Vermont he was running to support the interests of American voters tired of a "rigged" system.

"This type of rigged economy is not what America is supposed to be about," said Sanders, who proudly describes himself as a socialist, in prepared remarks for the rally.

The 73-year-old, little known outside political circles and his home state of Vermont, will be up against the fearsome machine of Democratic frontrunner Hillary Clinton as he attempts to secure his place on the ticket.

Sanders has insisted he is relishing the opportunity of going toe to toe with Clinton, widely seen as the overwhelming favorite to win the Democratic nomination.

Sanders has for years warned of the growing economic gap in America, stressing that "millionaires and billionaires" run a system that benefits the wealthy at the expense of huge numbers of working-class and poor citizens.

"Ninety-nine percent of all new income generated in this country is going to the top one percent," he said last month.