Ron Broomfield, from Lincolnshire, died in April aged 80, and was cremated in the gnome outfit he regularly wore.
Over the years, the retired window cleaner raised thousands of pounds for charities including the NSPCC.
He appeared on various TV programmes, including the Alan Titchmarsh Show, and lived in Gnome Cottage, Alford, which became a well-known local landmark.
His niece, Patricia Hammond, said Mr Broomfield was "remarkable", "well-loved" and "brought happiness into the lives of many people".
She said his greatest ambition was for his collection to feature in the Guinness Book of World Records.
However, he was beaten by Ann Atkin of The Gnome Reserve and Wild Flower Garden in North Devon, she said.
The Gnome Reserve is home to about 2,000 gnomes.
"Ron the Gnome", as he was also known, was originally from Finchley in north London, and began collecting the figures after the breakdown of his marriage.
Ms Hammond said: "He bought the gnomes, took them home and they kept smiling at him. After that, every time he saw a gnome he bought it and he would ask for gnomes as presents for Christmas and birthdays and was very disappointed if you didn't buy him one.
"When the children of Finchley walked past his house and saw his beard, they said he was starting to look like a gnome and suggested he dress like one too, so he did."
Mr Broomfield later moved to Alford, where his home became a shrine to the ornaments.
After his death, he was cremated dressed in his gnome outfit, complete with pointed hat and waistcoat.
His favourite gnome, Sandy, which he took everywhere, was adopted by his niece.
All proceeds from the gnome sale - on 15 July at the Lincoln Auction Rooms of Golding Young & Mawer - will be donated to charity.
A collection of about 1,800 gnomes - amassed by one man over half a century - is to be auctioned for charity.