The piece is known as the Lewis warder and is now expected to bring between 600,000 pounds ($NZ1,090,241) and 1 million pounds ($NZ1.81 million) at an auction next month.
The piece is a Lewis chessmen, first discovered on the Isle of Lewis in Scotland's Outer Hebrides in 1831. The circumstances in which they were first found is unclear, described by some sources as being shrouded in mystery.
The piece, the equivalent of a rook, is the latest of the missing chessmen to be identified. It is set to be auctioned at Sotheby's on July 2.
So far 93 pieces have been found, with four still missing from a full set. Most of the pieces are carved from walrus ivory from the tusk.
The chess piece was passed down to the family of the antiques dealer who did not realise its significance and kept it in a drawer for over five decades.
The Lewis chessmen are intricate, expressive chess pieces in the form of Norse warriors, carved in the 12th century.
The original hoard, discovered in 1831, are now held in both the British Museum in London and the National Museum of Scotland in Edinburgh — but four of the chess pieces remain missing.
Sotheby's European sculpture expert Alexander Kader said the find was "one of the most exciting and personal rediscoveries to have been made during my career".
He told the BBC his "jaw dropped" when he realised what they had in their possession.
"They brought it in for assessment," he said. "That happens every day. Our doors are open for free valuations.
"We get called down to the counter and have no idea what we are going to see. More often than not, it's not worth very much.
"I said, 'Oh my goodness, it's one of the Lewis Chessmen'."
