Saeed would be soon approaching the Election Commission of Pakistan for registration of the political party.
The development comes at a time when Nawaz Sharf is embroiled in the Panama Papers leak case and was dismissed as the Prime Minister by the Supreme Court.
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Hafiz Saeed, based in Lahore, is an internationally designated terrorist. He is believed to be having close relations with the Pakistani Army and the Inter-Services Intelligence (ISI). He continues to organize and sponsor terrorist activities in India under the garb of doing social work in Pakistan.
On August 1, his house arrest was extended by two months with authorities in Pakistan's Punjab province citing the maintenance of public order as the reason for the move.
He has been under house arrest since January 31 this year. His detention had been extended for three more months in April.
On January 31, Saeed and his four close aides -- Abdullah Ubaid, Malik Zafar Iqbal, Abdul Rehman Abid and Qazi Kashif Hussain) -- were detained by the Punjab government for 90 days under the Anti-Terrorism Act 1997.
This time Saeed's house arrest has been extended under the Punjab Maintenance of Public Order.
Authorities believe his "liberty" of Saeed is a continuous threat to the peace and tranquility in the country.
(With additional information from PTI)