The mission, scheduled for this week, will explore the feasibility of Robert Bigelow's plan to build a working commercial space complex by 2015.
When finished, it will consist of balloon-like modules strung together like sausage links and will serve as orbiting space accommodation, laboratory, college or entertainment venue.
The planned liftoff from Russia of Bigelow Aerospace's privately funded Genesis I spacecraft will mark the beginning of his company's attempt to break into the fledging manned commercial spaceflight business.
Bigelow, who made his fortune with the Las Vegas-based Budget Suites of America hotel chain, has kept quiet about the exact launch date of its prototype.
But the Russian space agency Roskosmos posted on its website that Genesis was scheduled to launch on Wednesday on board a converted Cold War ballistic missile from the Dombarovsky missile base in the southern Ural Mountains.
Genesis I is a one-third scale model of a commercial space station that the company eventually hopes to fly humans in.
It is outfitted with 13 interior and exterior cameras to shoot video and photos of the Earth.
"We know very little about the actual engineering and performance of these systems, [in fact] we really know nothing"
Mike Gold, corporate counsel for Bigelow Aerospace
Unlike the rigid aluminium modules that make up the international space station, the inflatable design consists of a flexible outer shell that can be expanded in space.
The module is padded with layers made of tough materials including Kevlar, a material used in some bullet-proof vests, to withstand speeding cosmic debris.
Nasa researched the concept in the 1990s for a potential trip to Mars, but later abandoned it after determining that the huge balloons were too costly.
Once in orbit, Genesis I will expand and circle the Earth for several years while scientists collect information about its durability and other capabilities.
"We know very, very little about the actual engineering and performance of these systems. As a matter of fact, we really know nothing," Mike Gold, a corporate counsel for Bigelow Aerospace said earlier this year.
Bigelow has pledged to invest about $500 million in total to build the station. About $75 million has been spent so far.
Later this year the company plans to launch a spacecraft called Genesis II for further study. Unlike Genesis I, the company plans to commercialise the mission and is currently taking orders to fly personal photos and mementos from the public on board Genesis II , for about $295 each.