It's reported posters have been put up around the Vatican advertising tickets for the draw priced at €10.
The first prize is a new Fiat Panda car with other prizes including bicycles, pens, a panama hat and an espresso maker.
All the money raised is said to be going towards the Vatican's work with the homeless.
Last week it was announced that showers were being installed near to St Peter's Square for the use of rough sleepers.
Pope Francis has received much praise for not living the lavish lifestyle normally given to a leader of the Catholic Church.
He wears simple clothing and has shunned the palace where his predecessors have lived, choosing a more modest apartment.
The raffle is expected to take place on January 8.