Frazier, who beat Muhammad Ali to win the 1971 heavyweight title during a famously bitter rivalry, died of liver cancer last year. He moved to Philadelphia as a teenager, after living in New York and South Carolina.
Nutter said it will cost $150,000 to build and maintain the statue, which will be placed outside the Xfinity Live! dining complex by the stadiums. Xfinity will put up $25,000 to kick off the fundraising, officials said.
There are no plans to use city money, Nutter said.
Family and supporters will serve on a committee to select the design and oversee the process. Nutter said a sculptor will be hired by the end of the year, with a goal of completion before the end of 2013.
A big group of Frazier's family was at the announcement outside City Hall. His daughter Renee Frazier-Martin, 51, said she was glad her dad would finally be recognized.
"Sometimes heroes and champions are honored after they're gone," Frazier-Martin said.
To donate to the fund, go to frazierstatue.com.
Contact Catherine Lucey at email@example.com or 215-854-4172. Follow her on Twitter @PhillyClout. Read her blog at phillyclout.com.