The Government will invite private sector bids this week for £170million worth of contracts auditing 10,000 town halls and health authorities.
Bidding for the work of the Audit Commission, which is being abolished, begins tomorrow with regulators hoping the process could help break the dominance of the major firms.
The outgoing commission will award the first contracts, for between three and five years, after which local authorities and public bodies will be able to hire their own auditors.
Of the 10,000 bodies, more than 9,000 are parish councils. The most lucrative work is likely to come from about 500 local authorities and NHS bodies.
As well as private firms, a mutually owned spin-off from the commission is set to bid. Former commission and audit chief Gareth Davies is leading the new mutual and is on leave of absence while the procurement process takes place.
The Financial Reporting Council suggested last year that the Commission's work could be passed to a rival of the Big Four firms to encourage competition in the audit market.