The proposed ban would be a "safer communities strategy" Martin announced at a community centre in Toronto's troubled Jane-Finch neighbourhood.
Gunfire has been responsible for 50 of the 74 homicides in Toronto this year to date.
Right now, handguns are currently classified as either restricted or prohibited weapons.
Liberal Leader Paul Martin announces ban on handguns, Thursday.
Under the current system, people are allowed to possess a restricted firearm for target practice, target shooting competitions, to form part of a collection or, in very rare cases, for employment purposes or to protect your life.
Martin's announcement comes nearly a month after he paid a visit to the Jane-Finch area, promising tougher gun laws and the creation of a $50 million fund to help combat gang violence nationally.
He pledged an additional $1.9 million to Toronto to help troubled young people learn life skills and encourage them to participate in the community.
The spate of shootings in Toronto prompted police to launch a gun amnesty program in November. Police collected 261 weapons, including 33 handguns, and more than 1,500 rounds of ammunition.
The Ontario government recently announced it was boosting the number of police and Crown prosecutors for the guns and gangs task force in Canada's largest city.
