The rare photo is thought to have been taken at a Swiss ski lodge in either 1979 or 1980, which would have made Diana (then Diana Spencer) 18 or 19-years-old. A bottle of whisky rests on the windowsill above her head.
The picture was discovered among the Daily Mirror's old photo archive and is marked with the date 26 February 1981 (believed to be the day it was bought) on the back - two days after Diana and Charles's engagement was officially announced by Buckingham Palace.
Interestingly, the words 'NOT TO BE PUBLISHED' are written at top of the photo.
Eric Caren, who bought the Mirror's photo library seven years ago, owns the picture. He told The Daily Mail: “It’s an intimate photo. I don’t know the man in the picture and he could be a friend or a boyfriend.
"This would certainly not be in the way the Royal Family would have Diana to have been presented."
The Daily Mail cites sources who speculate the man may be Diana's former boyfriend Rory Scott, or close friend James Colthurst.
The photo is being auctioned through RR Auctions in Hampshire as is being marketed as a "salacious teenage image of the future princess."
A spokesman told AFP the image would typically sell for around $1,000 "but because it has that (not-to-be-published) marking on it, we expect it to go for much more."
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Last summer marked the 15th anniversary of Diana’s death in a tragic car crash in Paris.
The date August 31, 1997, has been compared to the assassination of JFK decades before because everyone remembers where they were when they heard the devastating news that the 'People's Princess' was killed when the Mercedes she was traveling in with boyfriend Dodi Al Fayed plowed into a pillar in the Alma Tunnel.
Her car was being chased by paparazzi at the time of the accident.