The Government is believed to have signed a £1.6 billion contract with a private firm to carry out work for the NHS, sparking a bitter row with unions.
German-owned haulage giant DHL is believed to have been awarded a 10-year contract covering the supply and delivery of medical products, laundry, uniforms and clothing, laboratory equipment and other items.
The transfer of work from NHS Logistics will be bitterly attacked by critics of the Government's health reforms.
Hundreds of workers in NHS Logistics, who belong to Unison, are already being balloted for strikes after it became known that ministers were considering outsourcing the contract.
Karen Jennings, the union's head of health, said: "This is a very sad day for the NHS. The Government has not listened to the workforce or to reason. Staff across the NHS will be watching this privatisation deal, which will be viewed by many as symbolic of what is to come."
Unison said it made "no sense" to break up NHS Logistics.
Workers being balloted are based at Alfreton in Derbyshire, Runcorn in Cheshire, Normanton in West Yorkshire, Maidstone in Kent and Bury St Edmunds in Suffolk.
The result of the ballot is due to be announced next week.
The Government has argued that NHS Trusts do not get the best value for money over the supply and delivery of an estimated 500,000 different products.
It is believed that outsourcing the supply chain operations to a larger organisation could release an estimated £1 billion and create up to 1,000 new jobs, including a new depot in the Midlands.
