The ballot papers will be sent out on May 22 to around 130,000 CWU members and the vote will close on June 7.
The CWU has accused Royal Mail of abandoning a deal agreed last September. It claims Royal Mail's plan will result in 40,000 job losses, mail centre closures, a reduction in pay to the market rate, and a decrease in quality of service.
Royal Mail said it offered workers an £800 bonus for hitting targets in addition to the 2.5% pay rise, and accused the union of failing to understand "new commercial realities" such as the shrinking postal market and growth of its competitors.
A Royal Mail spokesman, said: "The union are well aware that Royal Mail's people are currently paid 25% more than our competitors pay, rising by a further 10% if you include the amount we pay for pensions. And they are also aware that Royal Mail's productivity is 40% lower than that of our rivals.
"The union must also realise that the consequence of meeting its demands would be hugely negative for Royal Mail's competitiveness and would result in large job losses as well as loss of vital contracts and revenue."
In September last year the two sides agreed a deal in which postal workers' pay would rise 3.9% over a year, the cap on the number of door-to-door items was lifted, and according to the CWU the Royal Mail committed to negotiating change and raising the value and status of jobs by April 2007.