The black-and-white photo is labeled "do not publish" and shows Diana lounging around an unknown apartment with two unidentified young men and a bottle of Scotch on the window sill.
RR Auction of Amherst, N.H., lists the item as, "Uncommon early 10 x 8 glossy news photo of a young Diana lying in bed" and will open the bidding Jan. 17 at $200.
Diana is shown in a relaxed but innocent candid pose snuggled up against a young man reading a book. Another male figure is in the foreground. Neither of the men is identified.
The photo is dated Feb. 26, 1981, which was two days after it was announced Diana and Prince Charles were engaged. It is not certain if that was the date the photo was actually taken or when it was turned over to the newspaper.
British media have speculated the photo probably came from the archives of the Mirror or Sunday Mirror newspaper; however, its origin is not known, CNN said.