Investors have already lodged bids worth A$2.35 billion at the low end of the indicative margin range, according to a note sent by the deal's bookrunners at 0540 GMT on Monday.
The notes will be issued at A$100 each and potential investors have been told the interest margin will be between 3.10% and 3.3%, according to an earlier Westpac statement.
As part of the deal, investors in an earlier series of Westpac AT1 bonds will be eligible to reinvest in the new bonds.
The final margin will be set following bookbuild which will now close on Tuesday at 0030 GMT for new investors and Wednesday at 0300 GMT for re-investment participants.
Australia's prudential regulator said in September it would review the rules around AT1 bonds, which were impacted by the collapse of Credit Suisse in March, to determine they were still fit for purpose.
The AT1 bonds are used by banks to stabilise cashflow in periods of stress, according to APRA.
The bonds became an object of concern to the global financial sector when Switzerland's financial regulator wrote down 16 billion Swiss francs ($17.8 billion) worth of Credit Suisse AT1s following its failure this year.
Under that deal, holders of Credit Suisse AT1 bonds received nothing, while shareholders, who usually rank below bondholders in terms of who gets paid when a bank or company collapses, received $3.23 billion.
Australia's assistant Treasurer Stephen Jones said earlier this year Australian law would not allow AT1 bond holders to be wiped out if a bank collapsed in order for equity holders to receive a return.
Commonwealth Bank, Australia's largest by market capitalisation, raised A$1.55 billion in May in AT1 bonds which was the first issuance of the bonds by a domestic bank down under following the Credit Suisse crisis.
($1 = 1.5366 Australian dollars)
(Reporting by Scott Murdoch in Sydney; Editing by Stephen Coates)
By Scott Murdoch