Mr Nicholson is expected to urge managers to try to answer 'three simple questions' when making decisions - and then 'get on and do it' if the answers are yes.
Mr Nicholson's first report to the NHS, published today, also tells managers to 'look out, not up, and get on with it'.
A DoH spokesman said: 'What David Nicholson is trying to do is to signal a dramatic break from the way in which Sir Nigel Crisp interacted with the NHS. There will be a change of tone, it will be more like a conversation and less like a series of orders.
'He wants to empower leaders to get on with the job rather than instructing them. He wants them to look out rather than up and when in doubt not to wait for guidance.'
In his speech Mr Nicholson is expected to say: 'This is the time to seize power and drive change locally. We have already done our bit at the centre by releasing ?8bn to services this financial year and with an operating framework which contained fewer national targets.
'We have got a set of circumstances in place which makes the NHS uniquely positioned with a combined financial surplus of ?500m, creating the head room to drive challenging policy.'
He will also say: 'We want you to feel liberated - the power is in your hands.
'If managers or chief executives are in doubt, ask yourself these three simple questions: will it benefit patients? Is it consistent with what the wider health economy is trying to achieve? Can I account for this to the pubic and their representatives? Don't wait for guidance, if you can answer those three simple questions with a yes, get on and do it.'
Mr Nicholson is also expected to urge managers to remain detached from the politics of the NHS.
'Politicians will come and go and patients and what they want and need from the NHS will remain. We are not paid to observe and comment on the politics of the NHS. Our job is to deliver care to patients and the community we serve,' he will say.
A DoH spokesman said this message had taken on new significance with the change of prime minister next week.
In his report to the NHS, Mr Nicholson says 2006-07 was one of the most challenging years in the history of the organisation and brought about some of its most 'fundamental changes'.
It says: 'The scale of what we are trying to do, genuinely transforming the organisation and the system that underpins the NHS, makes this point in history unique.
'It is clear over the next few years there will be more change, not less change. It will be driven by staff locally and it won't succeed unless we take patients and the public with us. Neither will it succeed unless NHS leaders start to look out, not up, and get on with it.'
It acknowledges that 'public perceptions and confidence are worryingly low' and the service has 'no time to lose in building on foundations we have put in place this year'.
The DoH is also launching new ways of communicating with managers. Weekly bulletin The Week will be followed by The Month and The Quarter.
The latter will contain the quarterly finance figures and performance information, and forecast deficits and workforce redundancies.