Financial Markets Minister Mats Odell told a news conference the government was contacting interested parties on Tuesday and that price would be the paramount consideration.
Only bids for the whole of V&S will be considered, Odell added, saying that while he believed Absolut production would stay in Sweden, this was not a requirement for the sale.
"It will be the one who pays the highest price and the one who after a full assessment shows that it offers the best (deal) for the Swedish households," he told reporters.
V&S, founded 90 years ago, has already drawn interest from U.S.-based Fortune Brands , France's Pernod Ricard, Bacardi, Britain's Diageo and Sweden's Investor in partnership with private equity firm EQT.
Investor, Pernod and Diageo reiterated their interest on Tuesday.
"We have said for several weeks that we are waiting for the auction to start," said Pernod spokesman Francisco de la Vega.
The V&S sale is part of a push by the centre-right government to raise 200 billion crowns ($31.2 billion) by paring down its portfolio of corporate assets.
The sales list also includes wholly owned mortgage lender SBAB and real estate firm Vasakronan, along with stakes in bourse operator OMX, bank Nordea and telecom operator TeliaSonera.
Odell said OMX, which is subject to a bid from Borse Dubai launched in partnership with U.S. player Nasdaq , will likely follow V&S as the next government transaction.
The privatization looked on track in September but the resignation of two top advisers over a trading scandal at their previous employer raised some doubts about the schedule.
Opinion polls also have suggested a growing disenchantment among voters with the plan, which the government set out during its winning election campaign in 2006.
But Odell said he saw no reason to alter the timetable.
Robert Berqqvist, chief economist at SEB, said the government was taking a careful approach to privatization both because of market conditions and political considerations.
"They cannot afford any mistakes concerning privatization activities," Bergqvist said.
He said tough international credit conditions may constrain the field of bidders.
"Some companies that would like to participate, they need to get access to funds. And in some cases it's difficult, at least these days, to get access to money," Bergqvist said.
Odell said the quality of the companies put up for sale would insulate buyers against the impact of global market turmoil.
He has left all options open for the sale of the other assets, but he said an analysis by financial adviser Morgan Stanley had suggested an auction was the best route for V&S.
Analysts agreed that an auction would fetch more than methods such as a bourse listing, would cost less and would carry a lower political risk.
"If they floated it and it was mispriced, the political price would be higher," said analyst Trevor Stirling at Sanford Bernstein.
"No one can say afterwards that you didn't get the right price if you have this auction procedure."
Stirling saw a $6 billion price tag for V&S and estimated a deal could navigate the regulatory process by the end of 2008.
Absolut, with its distinctive clear-glass bottle, is one of Sweden's most famous exports, with an advertising strategy that has spawned more than one marketing book.
Nearly 89 million liters of the vodka were sold in 126 countries last year.
V&S also owns Plymouth gin and Cruzan rum, made on St Croix in the Caribbean.
The unit that includes Absolut, V&S Absolut Spirits, is the biggest with sales of 4.4 billion crowns in the first nine months of 2007. The Wine and Distilleries units reported 557 million and 1.4 billion crowns of revenue respectively.