P Uthayakumar, leader of the outlawed Hindu Rights Action Force, who was released in May this year after spending 17 months in prison on sedition charges, would give up practicing law to concentrate on political activities.
Launching his Human Rights Party, he said Hindraf will continue to be "apolitical" and will now be led by his younger brother Waythamoorthy who is in self-exile in London.
Uthayakumar said he formed the Human Rights Party because both Malaysia's ruling coalition and a three-member opposition alliance had failed to address Indian grievances including a lack of jobs and limits on religious freedom.
He said he would give up practising law to fully concentrate on being a political activist and to lay the groundwork for the next general election, Malaysia Star said.
Uthayakumar, a former detainee under the Internal Security Act, also identified 15 of the 222 parliamentary seats and 38 state assembly seats that the party would contest in the next elections.
Uthayakumar announced at a ceremony attended by about 2,000 people, that he would be the protem secretary-general of HRP, but did not reveal any other party members and positions.
The Hindraf leader was detained under the tough Internal Security Act along with other leaders of the group in December 2007, after organising a massive protest by ethnic Indians against alleged marginalisation.
The Hindraf leaders were released in May, after Najib Razzak assumed the post of prime minister.
The government also indicated that it would review the ban on the outfit. Uthayakumar also released his book titled Malaysian Indian Political Empowerment Strategy: The Way Forward that was conceptualised and written during his 514 days detention in Kamunting.
He said he has applied to register his party, but it has not yet been approved.
Ethnic Indians make up about eight per cent of Malaysia's 28 million people, and many have alleged being marginalised in the Malay majority country.
Muslim Malays make up nearly 60 per cent of the population and ethnic Chinese comprise about a quarter of the population.