But the SNP leader admitted in a speech to supporters today that such a move could set the Yes movement back and warned supporters that this was not her preferred strategy at the moment.
Setting out the next steps in the campaign for independence on Brexit Day, Ms Sturgeon also revealed plans to establish a new "constitutional convention" to establish a new Claim of Right and forge a broader campaign for a Yes vote.
But the speech was branded “utterly predictable and entirely wrongheaded” by pro-union leaders.
Ms Sturgeon told supporters at a keynote speech in Edinburgh that she would be referring the referendum question from 2014 - "Should Scotland be an Independent Country? Yes/No" to the Electoral Commission to be re-tested amid concerns it may favour a Yes vote.
The SNP will also double its campaign spending as it seeks to persuade undecided Scots of the case for leaving the UK in aftermath of Brexit, Ms Sturgeon revealed.
It comes in a week which saw the Scottish Parliament vote in favour of holding a second referendum on independence with the Government seeking to do it this year, while an opinion poll by YouGov showed the first majority for independence in five years.
The First Minister warned that the legal position on whether the Scottish Parliament could stage such a vote is "unclear" but that she may be ready to test this in court and rejected claims it would be a "wildcat" vote.
The issue of whether such a move would be outside the powers of the Scottish Parliament - or instead leaves open scope for a non-binding consultative vote - has "never been tested in court.", Ms Sturgeon said.
"If a court ruled that it was legal, it wouldn’t be a “wildcat referendum” as our opponents like to brand it – it would be within the remit of the Scottish Parliament," she said.
"Now, should the UK Government continue to deny Scotland’s right to choose, we may reach the point where it is necessary for this issue to be tested.
"I am not ruling that out.
"But I also have to be frank. The outcome would be uncertain. There would be no guarantees.
"It could move us forward - but equally it could set us back.
"So my judgement at this stage is that we should use our energies differently."
The Scottish constitutional convention of the 1980s was the driving force behind the creation of the Scottish Parliament and Ms Sturgeon set out plans for a similar body to help build the case for independence.
"We will invite Scotland elected representatives - MSPs, MPs, the MEPs elected last year and council leaders – to come together to endorse a modern Claim of Right for Scotland through a new Constitutional Convention," Ms Sturgeon revealed.
"To declare that it is for the Scottish Parliament to decide whether and when there should be an independence choice and build support for that principle amongst civic Scotland."
The Scottish Government has already begun work on a new new case for independence, in the same vein as the Scotland's Future document publish ahead of the 2014 vote.
This will ensure Scots have the information they need to "make informed choices about the future of the country", Ms Sturgeon added.
"In the coming months, the Scottish Government will publish the outcome of that work," she said.
The “New Scotland” series of papers” will seek to provide the information and answers people want.
"They will provide detail on how Scotland can make the transition from a Yes vote to becoming an independent country."
But Tory leader Jackson Carlaw said Ms Sturgeon was seeking to keep the "divisive debate going" in Scotland.
"Nicola Sturgeon’s determination to plough on with preparations for another vote on independence is predictable, depressing and entirely wrong-headed," Mr Carlaw said.
“People across Scotland are sick and tired of her relentless pursuit of a referendum they simply don’t want.
“What people do want is action now to improve education, health, policing and all the other services they rely upon.
“On the day we leave the EU they want a government which focuses on Scotland's economy and jobs.
“And they want Nicola Sturgeon to put her referendum plans where they belong – firmly on the backburner."
Pamela Nash, chief executive of Scotland in Union, said: teh speech was designed to distract from the SNP’s "catastrophic failings" in government.
“It is sickening that Nicola Sturgeon is willing to neglect struggling schools and hospitals, and waste even more public money on her never-ending campaign to divide the people of Scotland. She even failed to rule out a Catalan-style ‘consultative’ referendum that would result in an expensive legal battle," she said.
The decision to allow the Electoral Commission test the question comes after concerns that it may be advantageous to the pro-independence campaign. Although the watchdog tested the question ahead of the last referendum, subsequent research saw it reject a Yes/No approach for the 2016 Brexit referendum on the basis that this could sway the outcome in favour of the positive "yes" response. Instead voters had a "Remain or Leave" option in the EU vote.
Ms Sturgeon said the current question is "simple, intelligible and well recognised across the country."
But she added: "Parliament made clear it wanted it re-tested and it is the next practical step we need to take within our powers to prepare for a referendum."
Ms Sturgeon said the UK Government's rejection of another independence referendum is "a sign of weakness, not of strength".
She said: "If they had any confidence in the argument for the Westminster union, they would have no problem with the people of Scotland having the right to choose.
"It is the fear of defeat that is making them so desperate to deny us the choice. We should draw encouragement from that."
The SNP will double their campaign budget to push for a second vote, according to the First Minister - but she urged activists to listen to people who are against independence.
She said: "Our party campaign is therefore ready to ramp up. We aim to double the SNP campaign budget this year to support new independence materials, local newspaper adverts and a new campaign film focused on undecided voters.
"It is vital that as we campaign we listen and engage respectfully.
"There are many people out there who voted No in 2014 now thinking about independence differently in light of Brexit.
"We must show that we understand the complexity of the issues they grapple with and that, for many, emotions will be mixed. So, we must make our case with passion but also with patience and respect. We must never stoop to the level of our political opponents."