The publishing company is to face pressure from the Yad Vashem Trust, an influential Jewish lobby group which keeps historical records of the Holocaust, to abandon the Irving book. If that fails, booksellers will be urged not to stock or promote it.
Last month, the trust successfully campaigned to get a self-published Irving book, Hitler's War, removed from display in book stores, including branches of W H Smith, Waterstone's and Dillons. In it, the author claimed that Auschwitz was not an extermination camp and the Holocaust was a propaganda hoax by the British.
Mr Irving began working on a biography of Goebbels four years ago and recently gained access to new diaries in Russian archives which the Sunday Times commissioned him to transcribe. It is believed to be paying him a fee of pounds 75,000.
The newspaper's association with Mr Irving provoked anger last week after the Independent discovered that Mr Irving had obtained access to the archives after being introduced by a Sunday Times journalist as an eminent historian.
In 1989, Macmillan published Mr Irving's biography of Hermann Goering, before he had stated publicly his view that the Holocaust never happened.
Roland Phillips, publishing director at Macmillan, said: 'David Irving is working on a biography of Goebbels for us. When I last spoke to David Irving he was very excited by some new diaries he had found and they will be used as background for his forthcoming book.'
Fred Barschak, a council member of Yad Vashem Trust, said: 'The Jewish community will be incensed by this, just as the Sunday Times has been reviled for promoting the views of a man who says the Holocaust was a hoax and that Hitler was unaware of atrocities against Jews. From a publisher as reputable as Macmillan, the decision is all the more reprehensible. They should know better.
'How can you entrust the writing of a biography of a key figure in history to a person who denies the existence of a period in history, in the face of eyewitness testimony of thousands of people who were there?
'Anything that gives Irving more respectability by a renowned publisher or newspaper is to be deprecated,' Mr Barshack said.
Mr Irving declined to say how much Macmillan was paying him, but said that it was substantially less than the Sunday Times fee. He had been fascinated by the 80,000 pages of Goebbels' diaries. He described Hitler's propaganda chief as 'one of the most vitriolic and virulent anti-Semites in the Nazi party'.
Mr Irving said it was a disgrace that groups of Jews should attack bookshops and intimidate them into banning his books: 'It's a scandal. I am just as much a victim as Salman Rushdie. I have written to the chairmen of Waterstone's and Dillons to protest.'
Asked whether the Goebbels diaries contained anything which made him revise his view of history, he said he had been 'dismayed' to find that Hitler had been directly associated with a particular massacre, when he had previously been assured by Hitler's aides that he had deplored the killings.
Asked whether he had seen anything to change his position regarding the Holocaust, he said: 'That question is still wide open. I still maintain Auschwitz was not an extermination camp. There were no gas chambers there. I think they were a figment of British wartime propaganda.'
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