The German Postal Service printed 14 million of the stamps in 2001 depicting the actress as Holly Golightly in the film Breakfast at Tiffany's.
But after Hepburn's son refused to grant copyright, all but a few sheets were destroyed.
Proceeds from the sale in Berlin next week will go to charity.
The stamps were printed as part of a series featuring classic film stars, but it was only after production that Sean Ferrer, the actress's son, was contacted for copyright permission.
"In the original photo, she's got sunglasses hanging from her mouth, but they had flipped the negative and replaced the glasses with the cigarette holder," Ferrer told AP.
He suggested either the original photo or an alternative, but the postal service hastily replaced the actress with a generic film roll and ordered the stamps to be destroyed.
Two sheets were spared, one for the Postal Service Archives and one for the German Post Museum, however two additional sheets of stamps disappeared.
During the last six years, five of the missing stamps were sold at auction for between 62,500 euro (£54,700) - 173,000 euro (£151,000) by stamp appraiser Andreas Schlegel.
However, Ferrer already had a sheet the government had sent him for approval in 2001, which will now be sold.
Mercer Bristow, from the American Philatelic Society, said a contract Ferrer signed with the German finance ministry earlier this year, securing rights to the stamp sheet and ensuring the government would not sell either of its sheets until 2040, helped drive up the reserve price of the set.
"It goes back to supply and demand. It's the only sheet out there people can bid on and she's still such a popular actress," he said.
Money raised will be split between Unicef and the Audrey Hepburn Children's foundation.
source: http://www.bbc.co.uk/news/entertainment-arts-11550814
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