Ed Miliband will promise to make politics more "open, transparent and trusted" by reforming Labour's relationship with trade unions.
The party leader will pledge to abolish the automatic "affiliation" fee paid by three million union members to Labour.
Mr Miliband will also say the selection of parliamentary candidates should be widened, with the general public helping to choose them.
It follows a row with the Unite union over picking a candidate in Falkirk.
Unite, one of the party's biggest donors, is accused of signing up its members to Labour in Falkirk - some without their knowledge - in an effort to get its preferred candidate selected.
The union's leader Len McCluskey denies people were recruited without knowing about it, and says Unite worked within the rules.
The BBC's political editor Nick Robinson said the Labour leader hoped the changes would put him on the front foot after coming under sustained attack from David Cameron in recent weeks as well as galvanise the party's direct links with union members.
'Death throes'In his speech on Tuesday, Mr Miliband will call for a system which is "open, transparent and trusted - exactly the opposite of the politics we saw in Falkirk. That was a politics closed, a politics of the machine, a politics hated - and rightly so.
"What we saw in Falkirk is part of the death throes of the old politics. It is a symbol of what is wrong with politics. I want to build a better Labour Party - and build a better politics for Britain."
End QuoteThis speech is designed to get Mr Miliband off the hook of a row that has caused him real damage"
He will call for an end to affiliation fees - where members of supportive unions pay an automatic levy to Labour unless they opt out - and instead involve only those who "deliberately" choose to join the party.
The fees are worth about £8m a year to Labour. Insiders estimate making them non-automatic would cost the party about £5m.
Mr Miliband will say: "We need to do more, not less, to mobilise individual trade union members to be part of our party: the three million shop workers, nurses, engineers, bus drivers, construction workers, people from the public and private sector, that are affiliated to the Labour Party.
"The problem is not that these ordinary working men and women dominate the Labour Party. The problem is that they are not properly part of all that we do. They are not members of local parties; they are not active in our campaigns."
The Labour leader will argue that unions should have political funds "for all kinds of campaigns and activities as they choose" but individual members should not pay Labour any fees "unless they have deliberately chosen to do so".
He will add: "I believe we need people to be able to make a more active, individual, choice on whether they affiliate to the Labour Party.
"So we need to set a new direction in our relationship with trade union members in which they choose to join Labour through the affiliation fee: they would actively choose to be individually affiliated members of the Labour Party and they would no longer be automatically affiliated."
'Strict'This could raise the current Labour membership from the current 200,000 to a "far higher number", Mr Miliband will say.
He will also promise to look at the idea of holding open "primaries", where all adults, not just party members, can vote for the selection of a candidate in their constituency.
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Lord Prescott: "It is radical and courageous"
He will say such a system will be used to select Labour's runner for the London mayoralty in 2016.
Mr Miliband will also argue the party should impose a code of conduct for those seeking selection and "strict" spending limits on them and organisations backing them.
'Not new'One union leader said making the political levy voluntary had been first tried by Conservative prime minister Stanley Baldwin in the 1920s and repealed by the Labour government in the late 1940s.
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"It is not a new idea," he told BBC Radio 4's Today programme. "It was introduced to weaken the trade unions' links with Labour. People have the right to opt out if they want to. I don't think it is a good idea."
Mr Hayes suggested the country was run by a "political elite" which was "excited" by attacking the unions and Labour's relationship with the unions was vital to keeping them in touch with the "concerns and affairs of ordinary people".
"The political class in this country needs an injection of ordinary working people," he said. "If you look at some of the biggest changes in the history of the country, they have been as a result of the input of the trade union movement."
An internal party inquiry in Falkirk found evidence Unite officials had signed up new members without their knowledge, breaching party rules, to try and get their favoured candidate elected. But Mr McCluskey has said he has "no trust" in the probe.
The Conservatives have said Labour refuse to take any more money from the unions until an entirely new system of funding is agreed.
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