Founder of 'The Australian Muslim Party' Diaa Mohamed said the party would be fielding candidates in every state in the hope of winning a Senate seat at the next federal election.
The party, Mohamed said, was also formed in response to growing political activism against Islam.
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He said the party would provide a platform for his community on the national political stage, after criticism that "Muslims were not loud enough" in the public debate.
"Maybe it is because we didn't know how, or we were a bit too fragmented, so hopefully this will at least give us that opportunity," Mohamed said.
"We gave it some thought. There are going to be a lot of questions raised in the coming days of the events recently, and this is the whole reason we created this party," he said.
"So it is as good a time as any to launch it," he added.
Prominent Sydney Muslim community leader Jamal Rifi said it was timely for someone to step up and share the burden of representing Australia's Muslims.
Political representation, he said, was the best way to counteract notions that Islam and Muslims are not compatible with the Australian way of life.
"What is [better] than we actually put our young boys and girls to represent us at the seat where decision making is taking place - and that is in the Parliament," Rifi said.
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