Yang writes that he was also encouraged by "some members of Congress" to vie for commerce secretary, but ultimately decided to run for NYC mayor.
A source close to Yang and familiar with the plans confirmed the unnamed party's formation to Insider. It will be launched with Yang's upcoming book.
The former tech entrepreneur launched an outside bid for the presidency in 2020, on the back of a pledge to introduce a universal minimum wage.
Unofficial results of in-person votes left Yang in fourth place, with the Brooklyn borough president, Eric Adams, holding a commanding lead.
Yang faced backlash last week over comments he made on mentally ill and homeless people during the NYC mayoral debate.
Adams also accused Yang of trying to "prevent" a person of color from becoming mayor. "I've been Asian my whole life," Yang replied.
This year, overall super PAC spending in the mayoral race has hit more than $24 million, according to the New York City Campaign Finance Board.
"We need to get them off of our streets and our subways into a better environment," Yang added. His NYC mayoral debate comments drew swift backlash.
The advent of ranked choice voting makes June 22nd's primary harder than ever to predict, with Andrew Yang, Eric Adams, and Kathryn Garcia at the top.
Evelyn Yang, a Queens native, decried a "toxic narrative" of her husband being "not a real New Yorker ... somehow more foreign, less of this place."
Yang's answer during an interview with Ziwe Fumudoh prompted jokes from New York's residents, who said no "real New Yorker" likes Times Square.
Yang has made a few similar blunders in his New York City mayoral campaign, specifically in policy proposals that are already in place in some form.
Yang told Insider he believes he'd have the authority as mayor to lower the voting age to 16 and allow green-card holders to vote, but only locally.
Advisers to Shaun Donovan and Scott Stringer both told New York Magazine that they doubted Yang answered the questions without getting help.
Next week, LA County will vote on a three-year pilot program that would send direct payments to 1,000 residents of $1,000 per month - at least.
While Yang ran with the JD Salinger classic, rival Eric Adams picked "The Power Broker" by Robert Caro, and Maya Wiley went with James Baldwin.
Yang's initial tweet did not express any solidarity with Palestinians, even as Israeli airstrikes killed dozens - including children.