The 68-year-old, who suffered a stroke in June, will sell 45 lots, including a 1966 World Cup cap, his 1968 European Cup winner's medal and the blue Manchester United shirt worn in that final against Benfica.
"It was always my intention to leave the entire collection to my children," the BBC quoted him as saying.
"But I have three sons - how do you fairly divide up this sort of collection between them? They have each selected some pieces they would like to keep for themselves."
The former tough-tackling midfielder, who also won two league titles with Manchester United, famously celebrated England's 1966 World Cup final victory over West Germany by dancing on the Wembley pitch. It is the only time England have won the trophy.
"I'm as patriotic as the next Englishman and will always cherish my memories and the friendships I made in my playing days, but at this stage of my life I would rather have some control over the distribution of my memorabilia and know that my family will benefit," Stiles added.
The World Cup winners medal is expected to sell for between 100,000 and 150,000 pounds at the Edinburgh auction on October 27.
