The permanent secretary of the Academy, Horace Engdahl, is scheduled to make the announcement in Stockholm on Thursday at 1:00 pm (1100 GMT).
In line with tradition, the Academy gave no indication of its choice.
Among experts and punters the guessing game is in full swing. Some say the Swedish Academy will go with a dark horse, while others say it will be a favourite.
On Ladbrokes’ online betting site – which last year correctly had Orhan Pamuk of Turkey as the winner – Italian novelist and essayist Claudio Magris is in top spot with 5-to-1 odds, followed by Australian poet Les Murray and US author Philip Roth.
Lesser-known writers such as French poet Maryse Conde or Estonian author and poet Jaan Kaplinski are mentioned as possibles, while big names cited include US author Don DeLillo and Syrian poet Adonis, the pseudonym for Ali Ahmad Said.
Others making the rounds are Italy’s Antonio Tabucchi, Amos Oz of Israel, South Korean poet Ko Un and Mexican writer Carlos Fuentes.
The Nobel season starts with the announcement in Stockholm of the prize for medicine on Monday, to be followed by the physics prize on Tuesday the chemistry prize on Wednesday and the literature prize on Thursday.
The peace prize will be announced on October 12 and the economics prize October 15.
Each Nobel Prize this year is worth 10 million kronor ($1.37 million).
See also: Jeanne Rudbeck takes a sneak preview of the Nobel Literature Prize