Bildnis Fraeulein Lieser (Portrait of Miss Lieser) was commissioned by a wealthy Jewish industrialist’s family and painted by Klimt in 1917 shortly before he died.
The well-preserved painting, which shows a dark-haired woman, was presented to the public in Vienna for the first time on Thursday (Austrian time).
It was the first time the work was seen since a Viennese exhibition in 1925, with a black-and-white photo cited as the only previous proof of its existence.
The photo identifies the last owner of the painting as a member of the Lieser family.
Henriette Lieser, who had remained in Vienna despite the Nazi rule, was deported in 1942 and murdered in Auschwitz in 1943.
The unfinished portrait re-emerged when the current owner sought legal advice from lawyer and art law expert Ernst Ploil before inheriting it.
Unclear how family of the current owner inherited painting
The family of the current owner has possessed the artwork since the 1960s, Mr Ploil says.
“We have a gap between 1925 and the 1960s.”
But Mr Ploil stressed they had found no evidence the work had been looted, stolen or unlawfully seized before or during the Second World War.
It is now set to be auctioned on April 24 on behalf of the current Austrian owners and the legal successors of the Lieser family.
The sale is in accordance with the Washington Principles, which determine the procedure for returning art stolen by the Nazis.
The back of the painting is “completely untouched” and has “no stamps, no stickers, nothing”, Mr Ploil said.
“There are no indications of any illegal confiscation during the Nazi era, i.e. the usual stamps from the Gestapo or a shipping house where looted art was stored,” he said.
No claims have yet been made by the descendants of the Lieser family, but some of them have travelled to Vienna to see the painting.
Klimt portraits rarely come on the open market.
The Kinsky auction house estimates its value at 30 to 50 million euros ($49 million-$82 million), but higher sums are conceivable.
Last June, Klimt’s Dame mit Faecher (Lady with a Fan) was sold in London for £74 million ($142 million), setting a new European art auction record.
Painting returns to family after mobsters’s theft
It comes as an 18th-century British painting stolen by mobsters in 1969 was returned to its family more than a half-century later.
The John Opie painting, The Schoolmistress, is the sister painting of a similar work housed in the Tate Britain art gallery in London.
The US Federal Bureau of Investigation’s Salt Lake City field office believes the Opie piece was stolen with the help of a former New Jersey politician, then passed among organised crime members for years before it ended up in the southern Utah.
A Utah man had purchased a house in Florida in 1989 from a convicted mobster and the painting was included in the sale.
It remained at the house until the man died.
Opie’s paintings have sold at auction houses including Sotheby’s and Christies, including one that sold in 2007 for almost $1.5 million.