"It was fortunate that Armstrong leaned forward to see what he was doing, and I noticed he had his visor up which meant, crucially, his face was visible for a few seconds.
"I managed to get three separate good shots and I knew there was a programme for planetary images that allows you to stack pictures on top of each other to get more detail. So I thought 'what if you put these frames through that?'
"I couldn't believe it when the image emerged. You never see Armstrong's face on the Moon, and there he was. It's an unbelievable moment. Even Buzz Aldrin hadn't stepped on the Moon at that stage. It's never been seen before."
There are surprisingly few images of Armstrong on the lunar surface, because he himself took most of the photographs, and was only caught from behind in one shot by accident, when pilot Buzz Aldrin was recording a panorama.
A film camera on the landing module did pick up footage of Armstrong, but his features cannot be seen because his visor was down or he had his back to the spacecraft.
The new image of Armstrong was taken just minutes after he had stepped out of the landing module, before Aldrin had even walked on the surface.
Nasa has asked the Apollo 11 commander to make a quick survey and collect a haul of Moon rocks as contingency samples in case something went wrong and the mission had to be swiftly aborted.
Usually the moonwalkers kept their gold-coloured visors down to avoid the glare of the Sun, but for a few minutes Armstrong found himself in the shadow of the landing module and so lifted his shield for better visibility.
As he surveyed the area he paused allowing for his features to be captured in three frames. It was just minutes after he made his 'One small step for (a) man, one giant leap for mankind' speech.
Dr Robert Massey, of the Royal Astronomical Society (RAS) said: "I think this image is great, and a poignant reminder of how camera shy Neil Armstrong was compared to Buzz Aldrin.
"Armstrong really was a quiet hero, which is apparent as this is the only image we have of his face when on the Moon. It's an important record of a really crucial moment in the mission."
Astronomy expert Dr Dan Brown, of Nottingham Trent University, said it was 'touching' to finally see Armstrong's face during his moonwalk.
"Seeing a face makes this picture even more complete and real," he said.
"Seeing faces and therefore recognising people and their moods is something that is deeply linked to our thinking and psychology.
"Being now able to bring this into the imagery captured during the Apollo missions is really magical and touching.
"It will act as something that inspires even more and allows us to connect in a deeper meaningful way with what has happened on the Moon. Only setting foot onto the Moon ourselves would trump this in my opinion."
Mr Saunders, of Culcheth, first discovered the frames of Armstrong's face when Nasa released new 16mm footage for the 40th Moon landing anniversary in 2009, but it was too grainy to see any features. It was not until the space agency released new high definition (HD) footage a few years ago, that he could finally achieve the image.
Father-of-two Mr Saunders added: "I've been fascinated by the Moon landings right from being a child and I was always looking for new images and footage and always thought it was a shame that there were so many images of Buzz but hardly any of Armstrong.
"When Nasa released the HD footage I went back to the frames and now we finally have a shot of Armstrong.
"Watching all the TV programmes etc around the moon landing and the buzz surrounding the anniversary has really made me realise how odd it is that only I have seen this image that I've produced.
"The clearest ever image of one of the most important events in history is just sitting on my hard-drive! The fact that Armstrong's face is actually recognisable as him (rather than just 'a face') really personalises the event for the first time too."
The author Andrew Chaiken released a blurred imaged from the same footage in 2009 for the 40th anniversary, but at the time it was difficult to make out any facial features.
Commenting on the new picture, Professor Andrew Coates, an expert in space technologies at University College London (UCL) said: "The image is surprisingly sharp.
"Most of the images show reflections off Armstrong's and Aldrin's visors due to metal coating on the outside, but perhaps the angle here was just right."
Dr Francisco Diego Quintana, also of UCL and vice president of the UK Association for Astronomy Education added: "Neil had his protective gold visor up to see more clearly what he was doing. This is probably the only picture of his face while on the Moon."
