Auctioneers Dix Noonan Webb, selling the Conspicuous Gallantry Cross (CGC) medal on July 21, said it is the only CGC to have been awarded to a Scottish regiment and it is expected to fetch £120,000-£140,000.
Shaun Garry Jardine, 39, from Dumfries was awarded the medal when he was only 21.
Mr Jardine served as a corporal in the King's Own Scottish Borderers and later the Royal Regiment of Scotland, rising to the rank of warrant officer class 2.
On August 9 2003, while serving as part of a Quick Reaction Force in Maysan Province during the Iraq War, his team found themselves under attack from two positions near a security base.
Facing heavy machine-gun fire, the then-21-year-old ordered his team to provide covering fire and then assaulted the enemy positions in succession, allowing his men to move forward and forcing the enemy to withdraw.
He was praised for his quick-thinking, courage and inspirational leadership and awarded the CGC.
The medal is second only to the Victoria Cross in honouring combat gallantry.
Mr Jardine, who recently left the Army having joined aged 16, said he is selling the CGC along with six other medals as he would like to buy a house for his family.
Describing his actions in Iraq, he said: "I started running across the bridge and they had seen me immediately. They were lying down, prone position, and firing at me as I ran; I saw their fingers on the triggers, then the muzzle flashes and then I could hear the rounds zipping past.
"I remember thinking, why are they not hitting me? I got to within 15 or 20 metres of them and just thought, I'm going no further here."
The Scottish soldier killed two of his attackers before calling his team forward and attacking a third enemy position.
Christopher Mellor-Hill, head of client liaison at Dix Noonan Webb, said to date only 60 CGCs have been awarded, of which 15 were for the Iraq War.
"The award to Jardine is unique to the King's Own Scottish Borderers and is the only CGC to have been awarded to any Scottish regiment," he added.