The auction would be the first since the government halted auctions in April to stabilise domestic prices, analysts said.
The province moved a million tonnes of stock this year to try to bring down domestic prices from a seven-year high.
Wheat from two-to-three-year-old stocks would be sold from September 15-16, the exact amount to be decided later, the market official said. "We are expecting to sell more than a million tonnes," he said.
Domestic prices picked up slightly last week by about 20-40 yuan to 1,640 yuan per tonne in Shandong. "It's time (for wheat prices) to rise as demand has picked up," said one grain analyst.
In a tender last week, Beijing bought 50,000 tonnes of US and Argentine soyabeans and 2,000 tonnes of crude US soyabean oil for city reserves from domestic firms, market officials said.
The rare Beijing soyabean tender prompted some speculation that the official body might be trying out buying the raw material for local crushers, who faced difficulties buying foreign soyabeans, traders said.
International suppliers have tightened trade terms following massive defaults this year. "We have never heard of state reserve or provincial reserves buying crushing beans to replenish stocks.