The search will be in association with J.D.Roots - Jack Daniel's music campaign that celebrates the importance of where you're from and the role "home" plays in the creative process.
It will involve a series of three shows across the UK, taking alternative music acts back to their home towns for one-off intimate gigs during May.
This is the second year running that NME has launched a competition to find Britain's Best Small Venue, but the first time it has done it in partnership with Jack Daniel's.
Michael Boaler, brand manager for Jack Daniel's, said: "Jack Daniel's may now be a world-famous name, but it remains rooted in its home town beginnings and in the people of Lynchburg, Tennessee. Home is incredibly important to Jack Daniel's – the people, the ingredients and the care that goes into production are at the root of our Tennessee Whiskey."
Music fans will be invited to nominate their favourite small venue and entries will be judged not just on the building itself, but also on the music scenes they encourage.
Regional winning venues will form a list from which Britain's Best Venue will be chosen by an NME-assembled panel of experts, including artists, promoters and agents.
Emily Hutchings, publishing director for NME, said: "This nationwide search aims to highlight the hugely important role played by small venues in encouraging and nurturing new music talent – a matter very close to NME's heart.
"J.D. Roots shares those values and recognises all that small venues do for grassroots music by providing hubs for local music scenes, so this partnership makes perfect sense."
As well as being named Britain's Best Small Venue, the winning venue will also play host to a popular band who will perform as part of a special celebration later in the year.
The partnership was orchestrated by media agency UM London and Adam Bulleid from IPC Men & Music's Creative Media team.
The first of these competitions launched by NME was won by King Tut's Wah Wah Hut.
Separately NME has launched a poll to find the Ultimate Icon of the past 60 years as part of its 60th anniversary celebrations.
A shortlist of 60 artists who've featured on the pages of the magazine since its launch in 1952 is now live at for people to choose from.
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