The competition requires people to write a story from three words long to 300 to celebrate the National Year of Reading.
Visitors to the , called "What's your story", will be able to submit their story online and use the tools provided to design exactly how they want their story to look when it is published.
A selection of entries will be published in an online gallery on the microsite, which was created by Manchester digital marketing agency Code Computerlove.
The site is being promoted through the main Waterstone's website, PR and on social networking sites like Facebook and Bebo.
Bespoke stories written by top authors, including Doris Lessing, Nick Hornby, Lauren Child, Tom Stoppard and Irvine Welsh, will also be displayed in the gallery and in store windows from June 11.
Three winners, two adults and one child, will be chosen from online and store entries by a panel of judges and their entries will appear in a postcard book, alongside the authors' stories.
All profits from the sale of the postcard book will go to Dyslexia Action and English Pen.
The national winners aged over 18 will also win an Arvon Writing course, while those under 18 will receive £500 of Waterstone's vouchers.
James Barley, Code account director, said: "The microsite is an important tool for the Waterstone's competition; not only as a way to promote it but also to make it easier for people to enter."