Mohapatra's announcement comes months after he was expelled from the ruling party for allegedly plotting a coup to unseat chief minister and BJD president Naveen Patnaik.
Making the announcement at a press conference at his residence in Odisha's capital Bhubaneswar, the 73-year-old bureaucrat-turned-politician said the decision to convert OJM into a political party was taken at the general body meeting of the forum in Bhubaneshwar on March 30.
Mohapatra said the new party is likely to field candidates in 110 of the state's 147 assembly seats and considering to forge electoral alliance with the like-minded parties.
"Talks are on with like-minded parties. I cannot disclose detail at this moment," he told reporters.
Mohapatra has been Naveen Patnaik's non-official advisor for over a decade. He was first suspended and later expelled from the party after he allegedly plotted a coup to unseat Patnaik. The alleged attempt on May 29 last year forced Patnaik to return from Britain in the middle of an official tour.
After his suspension, Mohapatra launched the Odisha Jana Morcha (OJM), a political forum Oct 1, 2012 saying he wants to establish "internal democracy" in the state's ruling party. He was expelled in November 2012.
Mohapatra had given the chief minister six months time to change and asked him to act as per party's constitution. The new political party was formed because the chief minister did not make any efforts to reform, he said.
Mohapatra's OJM has organised several rallies and meetings across the state in past months against chief minister Naveen Patnaik.