Nigeria began to withdraw its 3,000 troops from the peninsula in the Gulf of Guinea on August 1 and speeded up the process at the weekend to meet a UN-brokered deadline.
A handover ceremony attended by foreign diplomats and Nigerian officials will be held in Archibong in the north of the peninsula on Monday.
Amadou Ali, Cameroon's deputy prime minister, will lead his country's delegation to the ceremony, where the Nigerian flag will be lowered and Cameroon's hoisted in its place, a senior government official in Yaounde, the capital of Cameroon, said.
Nigeria and Cameroon have since disputed ownership of the Bakassi peninsula since 1993.
The dispute led to clashes between troops from the two neighbouring countries stationed on each side of the territory.
The 1,000sq km patch of coastal swamp includes access to lucrative fishing grounds and maybe oil fields in the future.
Yaounde took Abuja to the International Court of Justice at the Hague in 1994, which ruled in favour of of Cameroon.
Nigeria rejected the ruling, saying that it did not take into account the interests of Nigerians living in Bakassi. The United Nations intervened and the two countries set up a UN-chaired joint commission to solve the crisis
After Monday's ceremony, the two sides are to meet to settle their maritime boundaries in line with the court ruling, officials said.
Nigerian President Olusegun Obasanjo and his Cameroonian counterpart Paul Biya signed a deal on June 12 under which Nigeria agreed to withdraw its troops and hand the territory to Cameroon.
Under the deal the islands of Atabong and Abana, which form the western part of Bakassi, will continue to be administered by Nigeria for two years.
Nigerians living in the peninsula will have that time to decide whether to remain Nigerian citizens living in Cameroon, to take Cameroonian nationality or move to the Nigerian mainland.
Nigerians living in Bakassi have accused Cameroonian security agents of harassment and extortion and fear attack when Bakassi is handed over.