Diageo has sent a sales memorandum to more than 20 potential buyers who expressed an interest in Dewar's. It hopes to complete a sale within a few months.
The Federal Trade Commission (FTC) ordered Diageo to sell the business by June over competition concerns. But Diageo is hoping to tie up a deal by the time of its results in March.
"We are looking to sell the business as soon as possible," said Jack Keenan, chief executive of UDV, Diageo's spirits business.
The world's largest drinks groups are understood to be interested in Dewar's, including Pernod Ricard, which was previously thought to have ruled itself out of the running. Other likely bidders include Allied Domecq, Seagram, Brown Forman and American Brands. Mr Keenan acknowledged that only the largest drinks companies would be able to afford Dewar's but said UK and US financial buyers had also registered an interest.
Analysts estimate that Dewar's could fetch up to pounds 700m. Several parties asked for exclusive talks but Diageo has decided to seek an auction to obtain a higher price.
There has also been a bidding frenzy for the Bombay Sapphire gin brand which Diageo has also been forced to sell. The deal has attracted more interest than Dewar's, as its size makes it affordable to smaller players. It could fetch around pounds 100m.
Mr Keenan also revealed that UDV is likely to sell some brands as part of the huge reorganisation of the group in the wake of the merger. However, Diageo has ruled out spinning off the Guinness brewing business and Burger King, its fast food chain, for the foreseeable future. John McGrath, Diageo's chief executive, said that a demerger would only make sense if the business was not being managed effectively, and he is determined to avoid that possibility.
Guinness' future was thrown into doubt when Brendan O'Neill, the head of the business, became the first major board director to quit Diageo after being appointed as the new chief executive of ICI.
In the first comments since the announcement of his departure, Mr O'Neill denied suggestions that he had lost out in a boardroom power struggle.
He said: "This ICI opportunity was too good to miss. I am moving from a perfect pint to perfect paint." Mr O'Neill firmly denied there was any possibility of a management buy out of Guinness.
Yesterday Diageo's shareholders sanctioned the board's decision to scrap its committee of non-executives, which was set up 10 years ago in the wake of the financial scandal that rocked Guinness. It also approved a pounds 2.8bn share buy-back.