The `Part of Me` singer - whose divorce from Russell Brand was finalised in July - would have been celebrating her second wedding anniversary on October 23 so instead of getting upset about it, she is planning to threw a huge bash, which will also mark her 28th birthday.
A source told The Sun newspaper: "Katy has been dreading October 23 for weeks now and has been trying to think of ways to turn it into something positive.
"It`s her birthday two days later and the last thing she wanted to do was spend that week depressed and miserable, which would then mean not doing anything to celebrate her birthday.
"Her pals have been persuading her to have a huge party or go to Vegas for a few days but Katy decided on throwing a small gathering at her home.
"She has decided to call it her divorceparty and it will be a day of doing what she loves with her favourite people."
Katy and Russell married in a romantic ceremony in India after a year of dating but 14-months later they announced their marriage was over.
Katy is now dating singer John Mayer, while funnyman Russell has been linked to a string of different women.