She said she would take on Chief Minister Okram Ibobi Singh in his constituency Thoubal in the Assembly polls next year.
The name of her party "People's Resurgence and Justice Alliance" was announced at the Johnstone Higher Secondary School here.
On the day she had broken her fast, she had let known her desire to form a political party to contest the Assembly election.
Interacting with the media, the 44-year-old activist sought the blessings of the people in her endeavour to enter active politics.
She said she wanted to tell the masses that she had the "guts" to challenge the chief minister himself in his own turf, but pointed out that her decision might not be appreciated by the electorates in that constituency.
Earlier, she had met Delhi Chief Minister Arvind Kejriwal and expressed her desire to meet Prime Minister Narendra Modi to take their advice on how to devise a strategy to contest the Assembly poll.
Sharmila had earlier said her sole agenda to contest the elections was to have the AFSPA repealed from Manipur.
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