The picture is thought to have been taken during 1979 or 1980, when Diana was aged 18 or 19, and before she met Prince Charles, the Telegraph reported.
The photograph shows Diana lying beside a male companion who is resting a book on her shoulder. A bottle of Johnnie Walker whisky is seen on a window ledge in the background.
The Daily Mirror had bought the picture in February 1981, two days after Diana's engagement to Prince Charles was announced.
However, the words "not to be published" are seen scrawled on the photograph and the picture remained hidden in the newspaper's archives until it was bought by a private archive seven years ago.
The photograph is now being put up for auction in New Hampshire, where it is being marketed as a "salacious teenage image of the future princess".
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I clicked on this hoping that tribune might have posted the unseen photo of this beautiful humanitarian.