The government says there will be three options on the ballot: the current first-past-the-post system, proportional representation and a preferential ballot.
The options are laid out in a white paper released by Premier Wade MacLauchlan on democratic renewal, starting a public consultation process before the plebiscite.
The government says before this year's provincial election, there were calls for a discussion on democratic renewal.
Because it has been two decades since the last set of electoral reforms were implemented, and with electoral boundaries scheduled to be redrawn before the next election, the government says a discussion on democratic renewal is timely.
The discussions will also include the number and distribution of seats in the legislature, possible changes to election laws, and a look at election spending and financing.
A special committee of the legislature will present an interim report by Nov. 30, which the government says will clarify the question to be posed in a plebiscite and present it to the house.
"Throughout our history, Prince Edward Island has benefited from democratic renewal and evolution," MacLauchlan said in a statement. "This white paper invites all Islanders to work together as we build on our traditions and particular context to put Prince Edward Island on the map for our democratic processes and rates of participation."