British Foreign Secretary William Hague said representatives from more than 35 countries and international organizations are expected to attend the London conference.
Yemeni President Abdu Rabbo Mansour Hadi was at similar meetings in the United States last year.
Yemen has struggled with national security in the face of a threat from al-Qaida in the Arabian Peninsula.
A national dialogue conference is expected to culminate in preparations for a draft constitution. General elections should take place in 2014.
Hague said Yemen is at a difficult transition point. While Hadi is working to implement reform measures, progress has been slow.
"The challenges from spoilers and the dire security situation are ever present distractions," Hague said in a statement. "Now is the time for action and I look to the meeting in March in the hope that real progress can be made for the future of all Yemenis and the security of the wider region."
Hague said that supporters of Yemeni political progress hoped to turn the $7.9 billion in pledges made last year into "real progress."