The silver-haired aristocrat, famed for his 2003 United Nations speech against the Iraq invasion, made the announcement in the wake of the president's humiliating defeat in regional elections.
Mr de Villepin lambasted Mr Sarkozy's presidency, saying he was worried the "French model" was disintegrating.
"We need a change in politics," Mr de Villepin said in a press conference in Paris. "I have decided to create a political movement, a free and independent movement, open to everyone, which is above divisions and can unite all good intentions.
"I am not here to fight for my personal ambitions. I am here to fight for a vision, a plan, and political convictions."
He described himself as "uneasy with the politics practised today" and bemoaned what he called a "failure of strategy and of policy" by France's leaders.
His as yet unnamed party would stand for "a France that lives up to its difference and originality," he claimed.
Mr de Villepin, a former member of the UMP, hopes to capitalise on growing French disenchantment with Mr Sarkozy, whose approval ratings are at a record low.
Mr Sarkozy's party lost all but one of mainland France's 22 regions in Sunday's poll.
A poll published this week suggested that 16 per cent of French people would like to see Mr de Villepin run for president in 2012, compared with 14 per cent for Mr Sarkozy, but critics say he has no political power base.
Michèle Alliot-Marie, the interior minister, quipped that his speech was "more Napoleon than De Gaulle".
The former dauphin of President Jacques Chirac who has never been elected to office said his new movement would be formally inaugurated on June 19.
Mr de Villepin was prime minister under Mr Chirac from 2005 to 2007 but has been sidelined since Mr Sarkozy's election.
He was been locked for years in a legal battle with Mr Sarkozy, who accused him of seeking to smear him. He was cleared in January's Clearstream trial but the prosecutor has appealed and he could face a retrial before 2012.
The launch of the new party came as Carla Bruni-Sarkozy said she would prefer her husband not to stand in 2012.
In an interview in Madame Figaro magazine, she said: "In my role as a wife, I don't really want that.
"Perhaps I'm worried it could damage his health, or maybe I just want to live out the days we have left in a certain peace.
"But whatever he decides, I will go along peacefully with him."
