Ministers are looking at saving tens of millions of pounds a year by abandoning expensive software produced by firms such as Microsoft.
Some £200 million has been spent by the public sector on the computer giant's Office suite alone since 2010.
But Cabinet Office minister Francis Maude believes a significant proportion of that outlay could be cut by switching to free 'open source' software such as OpenOffice and Google Docs.
Document formats are set to be standardised across Whitehall to help break the "oligopoly" of IT suppliers, and improve communications between civil servants.
The proposal is part of the coalition's drive to make its procurement more effective and efficient.
Speaking at a cross-government event showcasing new online services today, Mr Maude will say: "The software we use in Government is still supplied by just a few large companies. A tiny oligopoly dominates the marketplace.
"I want to see a greater range of software used, so civil servants have access to the information they need and can get their work done without having to buy a particular brand of software.
"In the first instance, this will help departments to do something as simple as share documents with each other more easily. But it will also make it easier for the public to use and share Government information.
"So we have been talking to users about the problems they face when they read or work with our documents - and we have been inviting ideas from experts on how to solve these challenges."
Mr Maude will add: "Technical standards for document formats may not sound like the first shot in a revolution.
"But be in no doubt: the adoption of compulsory standards in government threatens to break open Whitehall's lock-in to proprietary formats. In turn we will open the door for a host of other software providers."
Mr Maude will also hail changes designed to increase the number of small and medium-sized companies (SMEs) winning public sector contracts.
He will highlight the creation of CloudStore - an online marketplace for councils and other public bodies to buy software. Up to £10 million a month is being spent on the site, with more than half going to SMEs.
Saying the proportion of central government procurement from SMEs has risen from 6% in 2010 to more than 10% now, Mr Maude will add: "We know the best technology and digital ideas often come from small businesses but too often in the past they were excluded from Government work.
"In the civil service there was a sense that if you hired a big multi-national, who everyone knew the name of, you'd never be fired.
"We weren't just missing out on innovation, we were paying top dollar for yesterday's technology.
"One great example of the potential from small businesses was when we re-tendered a hosting contract.
"The incumbent big supplier bid £4 million; a UK-based small business offered to do it for £60,000.
"We saved taxpayers a whopping 98.5%. I don't think we can make savings of that scale everywhere but hard-working people expect us to try as hard as we possibly can."