The launch of the party came at a day-long meeting of around 320 people here during which the party's Constitution, which envisages establishment of 'Swaraj' in the country, was also adopted. The meeting was held at Constitution Club.
The new party will begin its electoral fight with Delhi where Assembly elections are due towards the end of next year.
"For the past one-and-a-half-years we have been knocking at the doors of various parties on Lokpal Bill. But every party betrayed us when it came to Lokpal Bill. So we decided during the fast in August that this movement will take a political plunge.
"As a result of this, the Aam Admi Party has been launched today. Aam admi (common man) will now contest elections, aam admi will vote and aam admi sit in Parliament. This party will change the way politics and political parties function in the country," Kejriwal told reporters.
Asked about Congress' reported objection to the use of 'Aam Admi', he said they hijacked the word earlier but they could not hijack the common man.
The formation of the party came after a bitter split with Anna Hazare over the question of the anti-corruption movement taking a political plunge as desired by Kejriwal.
Both Hazare and Kejriwal announced parting of ways on September 19 following differences over forming a party with the former sticking to his position that the movement should remain apolitical.
On October two, Kejriwal announced the formation of the party saying its official launch will be on November 26 to coincide with day the country's Constitution was adopted in 1949.
Kejriwal said the Vision Document speaks of bringing self-rule in the country and demands that the preamble be implemented in letter and spirit.
"The Panchayats have become corrupt. We are not talking about it. We want the gram sabhas, the mohalla sabhas in the cities to be actively involved in law making except for major issues like that on foreign policy and external security," he said.
There should be referendum, he said, and discounted objections about its effectiveness in the country.
"We also want to bring in a legal system where people get justice without having to spend money. Getting justice has become costly because lawyers charge heavily from people for fighting their case. Common man should have easy access to higher judiciary," he said.
After forming a National Council of 320 members which will be expanded by bringing one member from every district committee, Kejriwal said, 23 members were elected to the National Executive.
He said the strength of the Executive committee will be 30 and the remaining seats will be filled soon.
"We have to see that there is proper representation for all sections in the committee. If backward people, minorities etc does not have proper representation, then we can have five more members," he said.
He said the party will have two kinds of members – ordinary and active members. Anyone can enroll himself as an ordinary member by paying Rs 10 as fee for three years and an ordinary member who works for the nation and party tirelessly for four months then he will be made active member.
"The decision on making one an active member will be taken by the committees. For the first time in the history of Indian politics, it has been decided that if one becomes a member of the State Executive or National Executive Councils, his or her relatives will not find place in any councils.
"The same applies when it comes to fighting elections and the party will give prominence to youth and women who are kept at fringes in other parties. Every college will have a party unit," Kejriwal said.
He also said the party will have the Right to Recall and it will be implemented in National Executive council, State Executive Council and District Executive Council.
"The party's functioning will be transparent and donors list and expenses list will be uploaded on the website from time to time," he said, adding that the party will also have an internal Lokpal at the Centre and Lokayuktas at every state and district.
Any person can lodge a complain against any party member and if the Lokpal or Lokayukta finds a prima facie case then the person will be probed, he said.
He said his party is committed to provide at least 33 per cent seats to women for contesting elections.
The meeting also saw some disagreement among a section ofworkers who were not allowed to attend it. A group from Tamil Nadu was seen arguing with a party coordinator on why they were not accommodated.
A member of the Tamil Nadu group said they were not against the party but their problem was with the way in which delegates from the state were selected. "There is an issue. We have objection to the manner in which people were selected for the meeting," the member said.
A group from West Delhi's Tilak Nagar also voiced their disapproval about the way in which delegates were selected.
"They talk about change and transparency. But where is transparency? When we enquired about the meeting, we were told by West Delhi coordinator that there is no such meeting. How did they select delegates for the meeting. They selected their cronies," supporters Mohan Aggarwal and Sudhir Singh said.