The dissident group of the ruling BJP on Friday met at Patel's residence here and declared they would make a "big announcement" in the last week of July on their future course of action.
"Keshubhai has decided to form a third front, which will challenge the rule of the Modi government," a source close to Patel said.
If that materialises, Gujarat, where BJP and Congress are the two dominant parties, will witness a triangular contest for the first time in the elections scheduled in December.
"Keshubhai and other prominent leader of BJP Kanshiram Rana have not registered themselves as primary members of the party," former Chief Minister Suresh Mehta told reporters.
Mehta said they would hold a state-wide public meeting at the end of July and announce their next action plan.
"Wait for our announcement that will be made during the July end meeting. We are firmly behind Keshubhai and will do whatever he says. If he forms a new front, we will join him and he is also welcome to lead our party (MJP)," said Gordhan Zadafia, a former Home Minister in the Modi Government, who quit BJP and later formed his own party.
The anti-Modi faction would organise public meetings in the eight municipal corporation areas of the city, he said.
Those present for the meeting included Rana, Zadafia, chief of Maha-Gujarat Janta Party, among others.
Patel, who has openly criticised Modi at various public meetings in the last few months, had recently met senior party leaders in Delhi.
Patel was unceremoniously removed from the Chief Minister's post in 2001 and replaced by Modi.