The London Jewish Museum of Art said it paid nearly $43,000 for Chagall's 1945 work Apocalypse in Lilac, Capriccio, despite some experts estimating the value of the previously unknown work at more than $1.6 million, The Sunday Times of London said.
The Sunday Times said the London art gallery bid on the painting in secret to prevent larger galleries from learning of its existence and driving up its cost.
The art gallery also did not reveal details of the painting purchased at an October auction in Paris to avoid French authorities possibly holding back on an export license for the art work.
The watercolor painting by Chagall will be displayed at London's Osborne Samuel gallery starting this week, The Sunday Times said.
Notable deaths of 2014 [PHOTOS]