Abubakar said Saturday's announcement concerning the vice-presidential post was against the constitution.
"The 1999 constitution which is the ground norm of our democracy does not give the president power to either declare the office of the vice-president vacant or to withdraw the rights and privileges of the vice-president," he said.
He said he was taking legal action "to challenge this illegality in a competent court of law and I have also begun wide consultation with stakeholders in the nation to halt this sad and regrettable slide to tyranny and lawlessness".
However, the ruling party earlier cited constitutional rules stating that the vice-president must belong to the same party as the president.
The PDP had already suspended Abubakar last September after he was indicted on corruption charges by the country's anti-graft agency, the economic and financial crimes commission.
Abubakar, 60, publicly accepted his adoption by AC as its candidate for the 2007 poll in Lagos on Tuesday. In his acceptance speech he described the PDP as a "dying" party.
Abubakar had been Obasanjo's deputy since May 1999, but the two men fell out over a purported attempt by the president to seek a third term in office.