The money will go to the Terrence Higgins Trust, which provides care and support to Aids sufferers. Its befriending service is in touch with two-thirds of those with the disease in London.
The collection of 25,000 LPs and 23,000 singles, largely devoted to blues and soul, is being sold by tender through Sotheby's. Sealed bids have to be with the auction house by 29 July, the date of its rock and pop sale in Bond Street.
If no substantial offer is made for the entire group, the LPs will be offered separately for an estimated pounds 40,000- pounds 60,000 and the singles for pounds 80,000- pounds 100,000.
The rock star's collection contains some of the first records he ever bought, as Reg Dwight, his real name. There is also a collection he purchased from Bernie Andrews, a BBC Radio 1 producer. It covers the period 1964-1975.
Elton John, a committed campaigner against Aids, is a patron of the Terrence Higgins Trust, one of five like-minded organisations which already share royalties from his UK singles - totalling about pounds 500,000 since 1990. His latest offer was made spontaneously during a tour of the trust's office in London. Daryl Upsall, fund-raising manager, said: 'It was a wonderful gesture. We were gobsmacked. It wasn't what we expected when he came round but he was clearly moved by what he saw. The money will help us do a lot for those with Aids.'
Simon Prytherch, a spokesman for the star, who is currently resting after world tour, said: 'He is also selling his concert grand piano which he takes on tour. The proceeds will also go to the trust.'
The record collection filled a room at John's house in Old Windsor, Berkshire. Mr Prytherch said it had been packed into crates and stored while the house was redecorated. 'Probably that makes parting with it a little easier for him.
'There is a great emphasis on blues and soul and we have been told it is the best collection of its kind in private hands. There are some incredible rarities across the whole range of artists and styles.'
Some of the early records have 'Reg Dwight' written on the labels. There is material on obscure labels by artists now considered classic performers. The Stax Atlantic and Tamla Motown labels are covered in depth, and there are Beatles LPs in coloured vinyl and a Rolling Stones boxed set from Japan.Reuse content