At least half of the party's MPs are expected to be stripped of their spokesmanships and told to return to their constituencies to campaign to increase their majorities. Mr Kennedy is expected to replace many of Paddy Ashdown's office staff and media advisers with his own team after this month's party conference.
The reshuffle will reward those who supported his campaign during the election and, in a move to unite the parliamentary party behind him, his main rivals for the leadership. Simon Hughes, who came second in the leadership race, is expected to be given the coveted home affairs brief, while Jackie Ballard is unlikely to be penalised for mounting a strong campaign against co-operation with Labour. The Taunton MP is tipped to get the key health role.
A new position as Mr Kennedy's "PPS" will go to Sheffield MP Richard Allan who supported Ms Ballard, the only woman candidate in the leadership battle.
Don Foster, who stood down from the election to support Mr Kennedy midway through the race, is expected to be the environment team leader - a key position in the "green" Kennedy administration. Norman Baker, who has successfully promoted the party's concerns about genetically modified food, is likely to be the new agriculture spokesman.
Matthew Taylor, who ran Mr Kennedy's leadership campaign, is destined for promotion, possibly in a new co-ordinating party role which Mr Kennedy plans to create. And Phil Willis, a former headmaster who supported Mr Kennedy after gauging support for his own leadership challenge, is tipped to take on the party's education brief.
Steve Webb, an expert on pensions policy, will become social security spokesman.
Menzies Campbell, who opted not to stand for the leadership despite speculation that he would be a serious contender, has agreed to keep his foreign affairs spokesmanship. Campbell, seen as the party's elder statesman, will continue to sit on the joint cabinet committee with the Labour leadership.
Malcolm Bruce, the popular treasury spokesman who came third in the leadership bid, is likely to keep his job.
Rising stars of the 1997 intake - Edward Davey, Evan Harris and Michael Moore, Lembit Opik and Mark Oaten - are also expected to benefit in the reshuffle.