Nadim Baba, Al Jazeera's correspondent in Paris, said Villepin's new party could alter French politics even before the next election.
"A comeback by de Villepin could complicate the president's efforts to push through unpopular measures, such as raising France's retirement age, during the remaining two years of his mandate," he said.
Villepin, 56, who served as foreign and interior minister under Jacques Chirac, the ex-president, has been a fierce critic of Sarkozy.
"I am uneasy with the policies being implemented by the ruling party, whether it's domestic, economic, social, cultural or foreign policy," Villepin said.
Bitter falling out
The two men served together under Chirac, but had a falling out over who should succeed him.
Chirac campaigned for Villepin, but Sarkozy outmanoeuvred his opponent to win the presidential nomination from the UMP party.
A showdown took place last year when Villepin went on trial for allegedly taking part in a smear campaign to derail Sarkozy's presidential bid.
The Clearstream affair was a murky scandal where accusations of false bank accounts and slush funds swirled.
Villepin was acquitted of the charges but the prosecution has appealed.
Villepin floated the idea of a new party in March, after Sarkozy and the UMP suffered a humiliating defeat in regional elections.
A career diplomat and published poet who speaks flawless English, Villepin gained global attention for leading the opposition to the US invasion of Iraq at the UN security council in 2003.
During his stint as prime minister from 2005 to 2007, Villepin's "reputation was severely tarnished after rioting in French suburbs and mass national protests over labour reforms", our correspondent said.
Parties of the far-right may be the largest beneficiaries of Villepin's new political initiative, as the party could split support for the UMP.
Marine Le Pen, vice-president of the far-right National Front party, said she was "very happy" about the prospect of Villepin running for president in 2012.