There are long existing limitations of the sky coverage of astronomical Adaptive Optics (AO) systems that use natural guide stars (NGSs) as reference sources. In this work, we present numerical simulations and lab test results of an optical NGS pyramid wavefront sensor (PWFS) for the MMT AO system. The potential increase of sky coverage benefits from the gain in sensitivity of the PWFS in a closed-loop NIR AO system compared with the optical Shack-Hartmann wavefront sensor (SHWFS). The upgraded MMT AO WFS system will use IR avalanche photodiode (APD) array with extremely low readout noise (at sub-electron level), run at a high frame rate (over 1kHz), and cover the wavelength range from 0.85-1.8 μm. This upgraded system will access a larger portion of the sky by looking at fainter, redder reference stars. We use "yao" simulation to show the expected limiting magnitude gain of NIR PWFS compared with the existing optical SHWFS. The sky coverage will increase by 11 times at the Galactic plane and by 6 times at the North Galactic Pole when compared to traditional optical WFSs. This novel WFS will also enable observations of the dust obscured plane of the Galaxy, where the optical light of most stars is more extincted. We demonstrate the basic lab test with a set of double roof prisms. We evaluate the overall performance of the PWFS on our lab AO bench, present captured micro-pupil images and do wavefront reconstruction. We will upgrade to SAPHIRA and pyramid prism for later lab test. We plan to implement this system at MMT and carry out on-sky tests in Spring 2019.