The 1937 "Femme au Beret et a la Robe Quadrillee (Marie-Therese Walter)" sold for £49.8 (€55.87 million) at a sale of Impressionist, Surrealist and Modern Art at prestigious London auction house Sotheby's on Wednesday night.
"It's an incredibly important museum quality picture," explained James Mackie, director of the Impressionist and Modern Art department at Sotheby's ahead of the sale.
"It comes from a key era in Picasso's career, 1937, when he makes the great painting 'Guernica'," he added, referring to the masterpiece which portrayed the horrors of the Nazi bombardment of a Basque city during the Spanish civil war.
The painting also has a strong autobiographical appeal, said Mackie.
The main subject of the piece, Marie-Therese Walter, was the Spanish painter's "long time lover and muse".
But the looming figure of Dora Maar, whom he met in 1936, emerges in the shadows behind Marie-Therese, explained Mackie.
Two Salvador Dali paintings were also up for sale and went for double the estimate price.
Salvador Dali's, Maison pour Erotomane. Photo: Sotheby's
The two small oil works, "Gradiva" (1931) and "Maison pour Erotomane" (circa 1932), have been in a private collection in Argentina, having been bought directly from the artist by an Argentinean countess.
"They are a rediscovery, which is incredibly exciting," Mackie said of the two works.
Gradiva sold for £2.7million while "Maison pour Erotomane" went for £3.5 million, both to the same buyer.
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