Part of developer Argent's redevelopment of the King's Cross area, the square will become an integral part of the overhauled railway station, and will be bigger than any other new space created in central London for more than 50 years.
However, it is unlikely that the planning application will meet with a great deal of opposition - King's Cross will prove instrumental to the London 2012 Olympic Games, with the 'Javelin' train service from central London serving the Olympic Park, and neighbouring St Pancras station about to begin its new role as a Eurostar terminus.
The new square is yet to become part of London Mayor Ken Livingstone's 100 Public Spaces programme. But Peter Bishop, director of Design for London, said that due to the sheer scale of the square it will only be a matter of time before it becomes so.
Bishop has been involved in the project from the off, and recommended the competition during his time as a senior mandarin at Camden Council.
Bishop says: 'The space is roughly half the size of Trafalgar Square, and it will reveal the front of King's Cross for the first time in about 140 years. This is a project that needs to be treated with an awful lot of respect.
'Design for London is therefore very keen for a design competition to take place.'
The competition is likely to attract some of the biggest names in architecture, all of whom will be vying for an opportunity to showcase their work when this area becomes the major entry point of visitors to London.
A Network Rail spokesman said: 'We can confirm there will be a design competition. The current 1970s entrance only had 30 years' planning approval, so we have had to renew it every year.
'Once we are able to demolish that structure we will be able to create a great new canvas in the centre of London.'