Scotia Future has been formed by Chic Brodie, the ex-SNP MSP for the South of Scotland and will campaign on a platform of independence outside the European Union.
But it could threaten to further spilt the pro-independence vote at next May's election, with a number of Nationalist alternatives to the SNP on the ballot.
Mr Brodie as formed the new party jointly with Andy Doig, an Independent councillor in Renfrewshire.
The party has been approved by the Electoral Commission and plans to stand candidates in both constituency and and list seats at the next Scottish elections.
Mr Brodie said: “We are delighted to launch Scotia Future, a party that will move Scotland forward to real independence outwith the EU, as it has never been clearer that, devolution has had its day.
"Westminster and Holyrood are broken, but the only choice for Scotland is not a binary one between a dwindling voice in the UK and so-called independence in the EU. We have better options.
“Scotia Future believes in real independence. For example, it is unwise to seek to trade Scottish sovereignty away to the pro austerity and centralised EU before we have even gained independence. We favour a bespoke deal for Scotland with the EU similar to that of Switzerland, which is vital to safeguard Scotland’s sovereignty on the economy and defence.”
The SNP proposes rejoining the EU after a vote for independence.
The latest pro-independence party joins the Alliance for Independence (AFI) on the ballot paper. Headed up by another former SNP MSP David Thompson, the AFI is urging SNP supporters to vote tactically for it on the regional list where a vote for the SNP can be effectively "wasted" if the party wins overwhelmingly in the constituencies. The pro-independence Greens are also standing.
Cllr Doig added: “Scotia Future has three key aims, real Scottish independence, economic justice, and giving power back to communities.
"We do not just want to change flags but to change society. We seek a Scotland of equals where merit is the gold standard, a Scotland which is a fair and enterprising country based on co-operative principles and values.”