The painting - a portrait of Lady Laetitia Beauchamp-Proctor - was found by fine art consultant Tim Williams who embarked on extensive detective work to establish its authenticity.
The painting is now to be sold at West Sussex Washington-based auctioneers Toovey’s next week where it is expected to fetch between £8,000 and £12,000.
Romney (1734-1802) is renowned for painting many leading society figures, including Emma Hamilton, mistress of Lord Nelson.
The rediscovered portrait has been in the vendor’s family since the day it was painted. The sitter is a direct ancestor of the owner’s late husband.
It is not recorded why but the painting had been previously attributed to Angelica Kauffman sometime before 1915 - but Tim Williams had a ‘gut feeling’ when he first saw the protrait that is was a work by Romney - and set about proving it.
“I wrote to Alex Kidson, the leading authority on Romney, who confirmed that it was indeed by Romney and there was a considerable amount of supporting evidence,” said Tim.
“The date it was executed was recorded in Romney’s ledgers, as well as the cost of framing.
“It had been included in Alex Kidson’s scholarly catalogue raisonné of the artist but its whereabouts were unknown.”
He said Alex was “as excited as me about its rediscovery.
“It is rare to have such comprehensive provenance for a portrait of this date.”
He added: “This is the first time that this portrait has ever appeared on the market – almost unheard of for a 242-year-old painting.”
Portrait of Lady Laetitia Beauchamp-Proctor, oil on canvas, circa 1780, will be sold at Toovey’s on February 16.