A group of 50 New Politics Alliance for Democracy (NPAD) officials vowed to leave the party Thursday.
The decision boosts prospects of a split of the main opposition party and the creation of a new opposition party ahead of the Assembly elections in 2016.
The party officials held a press conference at the National Assembly to announce their decision.
"We have determined that with the current leadership, prospects for victories in future elections are bleak," the group said in a statement. "We are planning to work toward a new party, based in the Honam region, and eventually seek support across the country."
The officials are mostly from Gwangju and South Jeolla Province.
Many politicians based in the Honam region, a traditional stronghold of the NPAD, are apparently turning their back on NPAD Chairman Moon Jae-in and the so-called pro-Roh faction which has links to former President Roh Moo-hyun.
"We can no longer move forward with Moon and the pro-Roh forces," the statement said.
A glaring case of Honam's increasing disregard of the party is the victory of Rep. Chun Jung-bae, an independent, in Gwangju in the April 29 by-elections.
Since then, Chun has been at the center of speculation about a new party.
"The splitting of the party is inevitable," veteran opposition lawmaker Park Jie-won said in a radio interview Thursday. "Several groups are moving toward forming a new nationwide party, so many lawmakers are feeling the momentum for a change in the opposition landscape."
Chun hosted a dinner with 20 former opposition lawmakers Monday, including Chung Dae-chul, who serves as an advisor to the NPAD, to discuss preparations for an election for local administration heads in October.
Participants of the Chun-led meeting reportedly discussed the issue of establishing a new party ahead of the election. "It would be a lie to say that I wasn't interested in the election," Chun said in a media interview.
Recent news reports indicate that former NPAD Co-Chairman Kim Han-kil and former South Jeolla Province Governor Park Joon-young are also gathering forces for a new party.
Speculations of a party split is mounting as Moon's efforts to overhaul the party through a special committee led by Kim Sang-gon has failed to win support from rival factions.
The innovation panel decided Monday to abolish key party posts, such as the secretary general, because its appointment has escalated internal feuds. But the plan was criticized by some lawmakers, who said that such a move will only serve to consolidate the power of the chairman.