Kerry Tayor Auctions said the ivory lace gown is likely to fetch between Â£40,000 - Â£60,000.
The star wore the dress, designed by Edith Head, in the final scene of the 1953 movie. It was adapted slightly for her Oscar attendance.
The sale is scheduled to take place on 29 November.
Head also received the best costume Academy Award for her designs in the move, which co-starred Gregory Peck.
In the film - which sees Hepburn playing a bored princess falling in love with an American reporter - the actress combines the dress with a hat and a jacket.
However, she had the gown altered for the Oscars, featuring a differently-cut bodice, a plunging back and spaghetti straps.
Nicknamed her "lucky dress", Hepburn gave the garment to her mother Ella van Hemmstra, who eventually passed it on to a friend in America.
The dress is being sold by the family that received it from Hepburn's mother, along with a letter of authenticity.
The dress Audrey Hepburn wore in the film Roman Holiday - and later wore to the Academy Awards, where she won her first Oscar - is to be sold at auction.