Charles Leski Auctions will auction the cap, which collector Keith Attree claims once belonged to Waugh, in Melbourne on Sunday.
Attree claims the cap was given to him by Waugh during his time as a room attendant at the WACA Ground in Perth between 1992 and 2002.
"This is one that he had in his kit bag and exchanged for some memorabilia," auctioneer Charles Leski told Channel Nine Friday.
"We have a statutory declaration (saying it is authentic). If it is not a cap that was owned by Steve Waugh (then) it will not be auctioned."
Waugh's management told Charles Leski Auctions in a statement Friday: "Steve Waugh has never given away one of his Test baggy green caps. To auction this item is a misrepresentation of the truth."
Attree said the item, is signed "To Keith, many thanks, Steve Waugh."
"I think when Steve stops and thinks, he'll remember the occasion," Attree said.
A battered helmet and an Australian One-day-international yellow cap, both said to be owned by Waugh, are also being auctioned.
Waugh's baggy green cap is estimated to sell for upwards of 15,000 dollars (11,500 USD), auctioneers said.