Annexin A2 (A2)-induced microdomain formation is a key step in biological processes such as Ca-mediated exocytosis in neuroendocrine cells. In this work, a total of 15 coarse-grained molecular dynamics simulations were performed on vesicle models having a diameter of approximately 250 Å for 15 μs each using the Martini2 force field. Five simulations were performed in the presence of 10 A2, 5 in the presence of A2 but absence of PIP, and 5 simulations in the absence of A2 but presence of PIP. Consistent results were generated among the simulations. A2-induced PIP microdomain formation was observed and shown to occur in three phases: A2-vesicle association, localized A2-induced PIP clustering, and A2 aggregation driving PIP microdomain formation. The relationship between A2 aggregation and PIP microdomain formation was quantitatively described using a novel method which calculated the variance among protein and lipid positions via the Fréchet mean. A large reduction in PIP variance was observed in the presence of A2 but not in its absence. This reduction in PIP variance was proportional to the reduction observed in A2 variance and demonstrates that the observed PIP microdomain formation is dependent upon A2 aggregation. The three-phase model of A2-induced microdomain formation generated in this work will serve as a valuable guide for further experimental studies and the development of novel A2 inhibitors. No microdomain formation was observed in the absence of A2 and minimal A2-membrane interaction was observed in the absence of PIP.