diff --git a/bin/create-package.js b/bin/create-package.js
new file mode 100644
index 000000000000..8d0b29f2bc7c
--- /dev/null
+++ b/bin/create-package.js
@@ -0,0 +1,214 @@
+#!/usr/bin/env node
+// Copyright IBM Corp. 2018. All Rights Reserved.
+// Node module: loopback-next
+// This file is licensed under the MIT License.
+// License text available at https://opensource.org/licenses/MIT
+
+/**
+ * This is an internal script to add a new package to `packages` or `extensions`
+ * of the `loopback-next` monorepo.
+ *
+ * The script does the following steps:
+ *
+ * 1. Determine the parentDir and package name.
+ *
+ * The first argument can be one of the following:
+ * - package-name
+ * - @loopback/package-name
+ * - extensions/package-name
+ * - packages/package-name
+ *
+ * If the parentDir is not specified, it tries to guess by the current directory
+ * and falls back to `extensions`.
+ *
+ * 2. Run `lb4 extension` to scaffold the project without `npm install`. If
+ * `--yes` or `-y` is provide by the command, interactive prompts are skipped.
+ *
+ * 3. Tidy up the project
+ * - Remove unused files
+ * - Rename `tsconfig.json` to `tsconfig.build.json`
+ * - Improve `package.json`
+ *
+ * 4. Run `lerna boostrap` on the newly added package to set up dependencies
+ */
+'use strict';
+
+const build = require('../packages/build');
+const path = require('path');
+const cwd = process.cwd();
+const fs = require('fs-extra');
+
+/**
+ * Return a promise to be resolved by the child process exit event
+ * @param {ChildProcess} child - Child process
+ */
+function waitForProcessExit(child) {
+  return new Promise((resolve, reject) => {
+    child.on('exit', (code, signal) => {
+      if (code === 0) resolve(code);
+      else {
+        reject(
+          new Error(
+            `Process ${child.pid} exits with code ${code} signal ${signal}`,
+          ),
+        );
+      }
+    });
+  });
+}
+
+/**
+ * Main function for the script
+ */
+async function main() {
+  let name = process.argv[2];
+  if (name == null) {
+    console.error(
+      'Usage: %s <[parentDir]/package-name> [--yes]',
+      path.relative(cwd, process.argv[1]),
+    );
+    process.exit(1);
+  }
+
+  let parentDir = undefined;
+
+  // Check if the name is in the form of `<parentDir>/<name>`
+  for (const loc of ['packages', 'extensions']) {
+    if (name.startsWith(`${loc}/`)) {
+      name = name.substring(`${loc}/`.length);
+      parentDir = loc;
+      break;
+    }
+  }
+
+  const repoRoot = path.resolve(__dirname, '..');
+  if (parentDir == null) {
+    // Location not specified, try to infer it from the current directory
+    parentDir = path.relative(repoRoot, cwd);
+    if (parentDir !== 'packages' && parentDir !== 'extensions') {
+      parentDir = 'extensions';
+    }
+  }
+
+  const projectDir = `${parentDir}/${name}`;
+  const project = {
+    repoRoot,
+    name,
+    parentDir,
+    projectDir,
+  };
+
+  await scaffoldProject(project);
+  await tidyupProject(project);
+  await bootstrapProject(project);
+
+  promptActions(project);
+}
+
+async function scaffoldProject({repoRoot, parentDir, name}) {
+  process.chdir(path.join(repoRoot, parentDir));
+  console.log('Adding project %s/%s...', parentDir, name);
+  // Run `lb4 extension`
+  const args = [
+    'extension',
+    `@loopback/${name}`,
+    '--outdir',
+    name,
+    '--no-vscode',
+    '--no-eslint',
+    '--no-prettier',
+    '--skip-install',
+  ];
+  if (process.argv.includes('--yes') || process.argv.includes('-y')) {
+    args.push('--yes');
+  }
+  const cliProcess = build.runCLI(
+    path.join(repoRoot, 'packages/cli/bin/cli-main'),
+    args,
+  );
+  await waitForProcessExit(cliProcess);
+}
+
+async function bootstrapProject({repoRoot, name}) {
+  process.chdir(repoRoot);
+  // Run `npx lerna bootstrap --scope @loopback/<name>`
+  const shell = build.runShell(
+    'npx',
+    ['lerna', 'bootstrap', '--scope', `@loopback/${name}`],
+    {
+      cwd: repoRoot,
+    },
+  );
+  await waitForProcessExit(shell);
+}
+
+async function tidyupProject({repoRoot, projectDir}) {
+  process.chdir(path.join(repoRoot, projectDir));
+  // Update package.json
+  let pkg = fs.readJsonSync('package.json');
+  pkg = {
+    ...pkg,
+    version: '0.0.1',
+    author: 'IBM Corp.',
+    'copyright.owner': 'IBM Corp.',
+    license: 'MIT',
+    publishConfig: {
+      access: 'public',
+    },
+    repository: {
+      type: 'git',
+      url: 'https://github.com/strongloop/loopback-next.git',
+      directory: projectDir,
+    },
+  };
+  fs.writeJsonSync('package.json', pkg);
+
+  // Move tsconfig.json to tsconfig.build.json
+  fs.moveSync('tsconfig.json', 'tsconfig.build.json');
+
+  // Remove unused files
+  build.clean([
+    'node',
+    '../build/bin/run-clean.js',
+    'DEVELOPING.md',
+    '.vscode',
+    '.eslintignore',
+    '.eslintrc.js',
+    '.prettierignore',
+    '.prettierrc',
+    '.gitignore',
+    '.mocharc.json',
+    '.yo-rc.json',
+  ]);
+
+  // Run `lb4 copyright`
+  const copyrightArgs = [
+    'copyright',
+    '--owner',
+    'IBM Corp.',
+    '--license',
+    'MIT',
+    '--no-gitOnly',
+  ];
+  const copyrightProcess = build.runCLI(
+    path.join(repoRoot, 'packages/cli/bin/cli-main'),
+    copyrightArgs,
+  );
+  await waitForProcessExit(copyrightProcess);
+}
+
+function promptActions({projectDir}) {
+  console.log();
+  console.log(
+    `Package ${projectDir} is created. Please update the following files:`,
+  );
+  console.log('  - docs/site/MONOREPO.md');
+  console.log('  - CODEOWNERS');
+}
+
+if (require.main === module) {
+  main().catch(err => {
+    console.error(err);
+    process.exit(2);
+  });
+}
diff --git a/docs/site/DEVELOPING.md b/docs/site/DEVELOPING.md
index b65da0058f70..4c480a12e54a 100644
--- a/docs/site/DEVELOPING.md
+++ b/docs/site/DEVELOPING.md
@@ -549,6 +549,40 @@ repository.
 
 ### Create a new package
 
+Please run the following command:
+
+```sh
+cd loopback-next
+node bin/create-package.js
+```
+
+The script does the following steps:
+
+1.  Determine the location and package name.
+
+    The first argument of the command can be one of the following:
+
+    - package-name
+    - @loopback/package-name
+    - extensions/package-name
+    - packages/package-name
+
+    If the location is not specified, it tries to guess by the current directory
+    and falls back to `extensions`.
+
+2.  Run `lb4 extension` to scaffold the project without `npm install`. If
+    `--yes` or `-y` is provide by the command, interactive prompts are skipped.
+
+3.  Tidy up the project
+
+    - Remove unused files
+    - Rename `tsconfig.json` to `tsconfig.build.json`
+    - Improve `package.json`
+
+4.  Run `lerna boostrap` on the newly added package to set up dependencies
+
+If you would like to do it manually, follow steps below:
+
 To add a new package, create a folder in
 [`packages`](https://github.com/strongloop/loopback-next/tree/master/packages)
 as the root directory of your module. For example,