The artwork, titled Vecchio Sultano, was discovered in a Cambridge house clearance sale in 2023.
The image, made with watercolour paint and felt tip is an illustration of a scene from The Arabian Nights, a series of 500 pieces which Dali intended to create of Middle Eastern folktales, commissioned by wealthy Italian couple Giuseppe and Mara Albaretto.
Ms Downie said the couple intended to commission Dali to illustrate a bible in 1963, but upon the artist’s insistence, he instead ended up illustrating scenes from 1,001 Nights – a collection of Middle Eastern folktales.
It is thought Dali only completed 100 of the intended 500 works before the project was abandoned.
“Of these 100, half remained with the publishing house Rizzoli and were either damaged or lost – the other 50 stayed with the Albarettos and were later inherited by their daughter, Christina, who was also Dali’s goddaughter,” said Ms Downie.
“It is most likely that the work in question came from the batch of 50 which were retained and later lost by the publishers.”
It has been certified as authentic by Dali expert Nicolas Descharnes and has a pre-sale estimate of £20,000 to £30,000.
The painting will be offered for sale by Cheffins on 23 October.