What does this new league mean?

Hello new player here and just recently started.

What does it mean that new league starts? Do I need to start a new character?

tomorrow, after the downtime, you will have 2 options:

you can continue to play your current characters, right where they left off. Archnemesis will not exist, and you wont see any of the new sentinel stuff.

OR

you start a new character in the "Sentinel" league. this character has an empty stash (any stash tabs you bought will be there, but empty), and starts the story at level1. EVERY person that plays league starts like this. Full fresh start.

Level 87 may seem like a long way to start over, but if you desire to do any trading I strongly suggest restarting in the new league. You'll do everything faster the second go around, and the market for league is much more stable and reasonable. The vast majority of players will start over. Heck, the vast majority of players typically stop after 1-2 months then return if the next league looks interesting.