It is necessary to understand current wedge formation in order to understand the cause of the substorm expansion phase. In the companion paper we used Geotail spacecraft observations to show that the cross-tail current reduction within the inner-plasma-sheet current wedge results from a process that leads to a reduction in equatorial plasma pressure and a substantial reduction in flux tube ion content. Here we use the single-species continuity equation for plasma sheet particles to identify a plausible cause of these plasma reductions and thus for current wedge formation and the initiation of the substorm expansion phase. Specifically, we find that a convection reduction, which follows a growth phase period of enhanced convection, should cause a divergence of plasma sheet particles driven by diamagnetic drift that leads to flux tube content reduction. We find that the reduction in flux tube content should be longitudinally localized to the premidnight to midnight region where the current wedge has been observed to initially form and that the reduction must initiate within the region of the equatorial mapping of the Harang discontinuity, consistent with ionospheric observations of substorm onset. We also find that the reduction in flux tube content should initially develop slowly and then develop more rapidly as the current wedge forms. This is consistent with observations which show that expansion phase aurora, and thus also the current wedge, develops slowly for a few minutes before brightening rapidly, and it is as required if plasma sheet divergence driven by diamagnetic drift leads to current wedge formation and initiation of the substorm expansion phase.