British Gas said that the electricity price hike reflected the increasing costs of energy and delivery to customers' home, stating that costs have increased 16% since 2014.
British Gas owner Centrica accidentally leaked the plans on its own website on Monday evening.
Such announcements are highly sensitive because they can affect share prices.
Credit will be given to help protect 200,000 of the most vulnerable customers, it said, and stressed it was "one of the last suppliers to introduce a price rise, many months after increases by most suppliers".
Chief executive Ian Conn told the BBC Today programme: "Governments have had to make some very hard decisions about the future of the energy system and the way in which we now pay for that is through the bill".
Mr Conn went on to say the energy market "does need to be and could be reformed", but warned a price cap would reduce competition.
Big Switch said Centrica made £489 million in profits on its domestic customers during the first half of 2017 and Mr Conn received a 40 per cent pay rise in 2016 making his total remuneration package worth £4.15 million.
Angry British Gas customers have taken to Twitter to say they will be shopping around for a better deal.
A spokeswoman for the Department for Business, Energy and Industrial Strategy said: "Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor-value tariffs". "British Gas increase will cripple me".
We have announced today that because we are anxious about vulnerable customers this winter that an additional 200,000 customers who get a wrap home discount will be protected from the price rise.
"But they will really feel the impact when the big winter bills start to come through and they are paying hundreds of pounds more than savvy consumers who have moved away from incredibly expensive standard tariffs".
The Government's promise of a price cap for all households on standard variable rate tariffs appears to have been watered down in recent months. We realise that 3.1 million people are affected.
In the run up to the June General Election, the Conservatives promised and energy price cap, in a supposed departure from traditional Tory liberal economics which rejects state interference in the market.
Millions are facing a huge spike in energy bills from September after British Gas announced a 12.5% rise in electricity prices.
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