"We will set up a new Awami Parliament here at 5 pm," Qadri told his thousands of supporters at Aabpara square in Islamabad past midnight at the end of a 48-hour deadline given by him to Prime Minister Nawaz Sharif to quit.
Qadri did not spell out the criteria for constituting the Awami Parliament but said its decisions will be respected.
"The Awami Parliament will decide the future course of action and the destiny of the nation is going to change," he said.
Qadri has already declared the existing parliament a sham as it consisted of "tainted" lawmakers who came to power through "rigged elections".
The cleric also refused to meet an independent committee of lawmakers set up by the PML-N government to hold talks with him to end the protests.
The negotiation committee comprised of Aftab Ahmed Sherpao, Haider Abbas Rizvi and Ijazul Haq.
Qadri urged countrywide strike and asked his supporters to block highways and motorways to force the government to quit.
Resorting to his populist antics, he ordered his followers to sweep and clean the entire venue of the sit-in.
He praised men, women and children who have been steadfast in attendance since Thursday when he launched the protest march from Lahore to Islamabad.
Separately, Pakistan Tehreek-e-Insaf chief Imran Khan is protesting at nearby Kashmir Highway with his hundreds of supporters who joined his Azadi March from Lahore on Thursday.
Khan has upped the ante by threatening to force his way into the Red Zone by Tuesday evening where the Parliament, the President and the Prime Minister's residences and embassies are located.
He also announced resignation from national and three provincial assemblies.
Khan's party in official tweet said that all party lawmakers have handed over the resignations.
"Received the resignation of all MNAs from PTI, announced to massive crowd at Azadi March by Shah Mehmood Qureshi," it tweeted.
The efforts for talks with Khan have not succeeded, though government appointed a panel of opposition lawmakers to find a solution.
Opposition leader in National Assembly, Khursheed Shah, is heading the committee to talk with Khan.
Due to threat of Khan, government further increased the security of the Red Zone.
More than 40,000 security personnel have been deployed to protest the sensitive areas housing key government offices and diplomatic missions.