Artist Peter Engels created the portrait in honor of Kelly's 80th birthday this year.
Engels' "Vintage Portrait" is to be auctioned May 9 by Sotheby's in the Monaco Casino, ArtPR said in a news release.
Last year, Engels attracted the attention of the international press when his portrait of Nelson Mandela appeared on a billboard on Broadway in New York as Mandela turned 90. The move gave Engels' career a boost and his paintings now sell for as much as $81,500, ArtPR said.
"I am paying tribute to one of the most stylish women of all time," Engels said in a statement. "As I always paint my portraits with a pallet knife in sepia colourite, this gives this portrait of Grace Kelly an intense vintage look. The buyer will not just be purchasing a unique work of art, he will also be supporting a good cause."
The proceeds of the auction will go to the Lions Club Monaco, a charity which offers care of the disabled.
"Princess Grace was a captivating woman. She died tragically in the prime of her life. And just like John F. Kennedy, James Dean, Marilyn Monroe, Ernest Hemingway, Elvis Presley and John Lennon, she remains an icon who even now, 25 years after her death, continues to leave an impression. Even on art, so it seems," Engels said.