The oil on canvas, titled Venice, The Dogana from the Bacino di San Marco, is by Italian master Canaletto.
The 11-inch high picture was found by auctioneers Gorringes – which has an auction house in Grosvenor Park, Tunbridge Wells – at a home in Lewes. It had hung in the property for about 50 years.
It is believed to have once formed part of a larger picture.
The owner of the picture, who died last year, was given the piece by her mother and her family have now decided to sell it.
Philip Taylor, of Gorringes Auction House, saw the picture while carrying out an evaluation of a number of goods at the late owner’s home.
He said: “It was the finest house I’ve seen in Lewes, the owner knew exactly what she had with this Canaletto and she had a great many other antiques, about 80 of which we will be selling.
“But this is by far the most valuable.”
He said it is ‘incredibly rare’ to have a Canaletto for sale, and in recent years his works have sold for millions of pounds.
The 18th-century artist rarely signed his work, as he was so famous at the time it was unnecessary, Mr Taylor added.
The painting was bought in 1920 from London art dealer Arthur Tooth & Sons for about £100-£200. With inflation that is about £5,000-£10,000 today.
However, Mr Taylor said: “In real terms that’s not a helpful estimate, given you could buy a family home for £50 in 1920.”
Before ending up in Sussex, the piece was once the property of Auguste Châtelain. He was a 19th-century doctor, Rector of the University of Neuchâtel in Switzerland, and a passionate historian who owned at least one other Canaletto.
The painting will go under the hammer on September 28.
