By Jonathan Yeo, one of Britain's leading portrait painters, the oil on canvas has been on display at the National Portrait Gallery in London since September.
The picture, which shows the 16-year-old doing her homework and which measures nearly one meter by one meter, goes under the hammer at Christie's on May 14.
The auction house estimates the value at USD 60,000 to USD 80,000.
"I hope that whoever buys the painting knows that their generosity will directly help children in some of the most challenging environments in the world."
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Yeo, who donated the painting, met Malala in April 2013 when she was recovering from the severe head injury inflicted by a Taliban gunman as she sat on a school bus in northwest Pakistan.
Yeo painted Malala in Britain, where she has settled since the attack, and he said it had been a "privilege."
"I hope the painting reflects the slight paradox of someone with enormous power yet vulnerability and youth at the same time," he said.
Malala last year was nominated for the Nobel Peace Prize.