The collection, which includes the desk at which the then King Edward VIII signed the papers of abdication in 1936, as well as a piece of the wedding cake from his marriage to the American-born Wallis Simpson, is to be auctioned by Sotheby's in New York over nine days from 11 to 19 September.
The largest single sale to be undertaken by Sotheby's, it is sure to generate excitement among the legions of devotees of all things British and royal, in the United States especially, and eclipse the Christie's sale of 79 dresses from Diana, the Princess of Wales, here two weeks ago.
Mr Fayed bought the Bois de Boulogne residence of the Windsors from the City of Paris in 1986 on a 50-year repairing lease. He moved with his family into what had been the servants' quarters on the top floor. At the same time, he acquired all of the couple's possessions from the Pasteur Institute to which they had been bequeathed by the Duchess, who died in 1986.
While the collection's value has been set at about pounds 3m, Diana Brooks, president of the auction house, said yesterday that she expected the final tally from the sale to be "well in excess" of that sum. Some are already valuing the entire batch of 40,000 items at pounds 30m.
Mr Fayed, the owner of Harrods and of the Paris Ritz hotel, said that the entire proceeds from the sale would be distributed to children's charities in Britain, continental Europe and North and South America. "You will understand that this has been a very, very difficult decision for Mr Al Fayed," his spokesman, Michael Cole, said in New York. However, he added that with his wife, Heini, and his four children, Mr Fayed could no longer live in the house without expanding into the lower floors.
Insisting on the uniqueness of the sale, Mr Cole added: "Never has there been, probably since the reign of King Charles I, this number of possessions of an English king come at once on to the market for sale."
Experts at Sotheby's were also adding their assessments of the importance of the auction. "Every object tells a story," declared Joe Friedman, director of English furniture. "Through the collection it is as if the Duke and Duchess themselves were telling their own story. There could be no more intimate or poignant a record."
Under the gavel will be items ranging from paintings by Munnings and Degas, coins, military pieces, and, perhaps above all, the full array of the couple's wardrobes which, in some eyes, set them apart as important arbiters of fashion and taste in the middle of the century.