Kay's unparalleled access to the Princess is sure to ensure that Diana: The Untold Story, tops the best-seller lists when it is published on 10 July.
It is understood that while the book will repeat some of the stories previously published in the Daily Mail, for which Kay is royal correspondent, it also aims to correct "many false and destructive impressions".
It will paint a picture of a woman very different from the sad bulimic depicted in other books, such as Andrew Morton's.
Of all Fleet Street's royal correspondents, Kay was particularly close to the Princess, whom he considered a friend as well as a contact. He was once photographed meeting Diana in a car at the same time she had been complaining about the attentions of the Press.
After the Princess's death, Kay revealed that he had spoken to Diana on the phone from Paris just six hours before the fatal car crash. He attended her funeral though he declined to write about the service, something remarked on by the judges of the What the Papers Say Awards, who earlier this month named Kay as Royal Reporter of the Year.
The biography, for which Kay is receiving an advance of pounds 50,000, is being published by Boxtree, part of the Macmillan Group. They are billing the book as "her story in her own words" and they describe Kay as "Diana's closest journalist friend and confidante".
World-wide sales of the book are likely to make Kay very rich, though it is not known whether he will donate any of the proceeds to the memorial fund set up in her memory.
Last night Kay was in New York at an auction in aid of the Princess of Wales memorial fund.
A friend said: ''Richard has not rushed into this. He has thought long and hard before accepting one of numerous offers put to him, and then only after strict guarantees and extensive negotiations."Reuse content