Ocean Breeze features swimming pools, an operating theatre, a helipad and an escape tunnel leading to a submarine. It is expected to fetch around £18 million, with brokers claiming the vessel's history to be "a good selling point".
Iraq was granted ownership of the yacht, which was built in a Danish shipyard in 1981, following a legal dispute with a Jordanian company.
The decor includes mahogany carvings, gold tap fittings and deep-pile carpets, reports the BBC.
Hussein never stayed on the yacht because of concerns about political instability in Iraq. It has been moored in Saudi Arabia and the French port of Nice since it was built.