The stand-up comic will appear before the first round of filmed auditions take place today (May 23), with the new judging lineup of Gary Barlow, Tulisa Contostavlos, Louis Walsh and Geri Halliwell.
Kay personally asked producers to appear at the auditions, reports The Sun.
A close friend of Gary Barlow, Kay famously lampooned the talent show with his spoof comedy Britain's Got The Pop Factor... And Possibly A New Celebrity Jesus Christ Soapstar Superstar Strictly On Ice in 2008.
"Peter loves reality TV. He is also good mates with Gary and wanted to have a taste of it. He rang up the producers on the show and asked to be part of the team in Liverpool," a source said.
"He'll do a few gags and he may even throw in a Take That number."
Kay branded The X Factor "as dull as dishwater" in November.
Geri Halliwell was officially unveiled as Kelly Rowland's guest replacement on the judging panel yesterday.
Watch the video for Peter Kay as Geraldine McQueen's X Factor spoof single below: