The auction house says the 1941 Academy Award for Best Screenplay could go for as much as 1.2 million dollars.
The golden statuette was acquired by a Los Angeles-based charity four years ago.
"Citizen Kane" is the story of a power-hungry publishing magnate played by Welles and widely believed to be based on the life of William Randolph Hearst. It has been voted the number-one film in history by both the American Film Institute and the British Film Institute.
The Oscar will be displayed at Sotheby's in New York from December 7th through the 10th, and sold the following day.