The black and white photograph was taken on a skiing holiday before Lady Diana Spencer met Prince Charles.
The picture is believed to have been taken on a Swiss ski holiday around 1979 or 1980 when Diana would have been aged 18 or 19, the 'Daily Mail' reported.
It shows her lying on a bed in a chalet with a male friend, who is resting his book on her shoulder. On the window ledge behind them is a bottle of Johnnie Walker whisky.
The identity of the photographer is not known but the picture was sold to the Daily Mirror on February 26, 1981 - two days after Diana's engagement to the Prince of Wales was announced.
It seems, however, that the picture editor of the day had second thoughts about publishing an image of the future Queen in an intimate pose with another man and scrawled across it: 'NOT TO BE PUBLISHED'.
The picture remained in the paper's archives until it was bought seven years ago by the private Caren Archive, which is now putting it up for sale through RR Auctions in New Hampshire.
The 8x10 inch photograph would normally sell for around 750 pounds, but because it has the 'not for publication' note on the top, the auctioneers expect it to fetch significantly more.
Eric Caren, owner of the Caren Archive, which is the largest privately owned printed newspaper collection in the US, said he acquired the photograph simply by chance after asking the Mirror group if they would be interested in selling some of their archives.
"It's an intimate photo - I don't know the man in the picture and he could be a friend or a boyfriend," Caren said.
Sources suggested the man could be Rory Scott, an early suitor of Diana's.
"My guess is that it was a privately taken photograph that the Mirror purchased but for some reason did not publish. Why the heck not I don't know - I don't know if it was pressure from the Royal family or an internal decision," Caren said.
"It captures the moment when the engagement had been announced two days before and the press were going mad over Diana - but the Daily Mirror just weren't going to publish this photograph of her in a comfortable position with a man other than Prince Charles," Bobby Livingstone, vice president of marketing at RR Auctions, said.
London: A previously unseen photograph of teenage Princess Diana in an intimate pose with an unidentified man which has 'not to be published' scrawled on it, has gone under the hammer in the US.
First Published: Friday, January 04, 2013, 20:09