The piece by Irish-born artist Sean Scully was purchased as part of the department's Art in Embassies program and will be reportedly installed at the new mission due to open in 2017.
"This piece was purchased under the market price after considerable negotiation with both the artist and the gallery. This is an important part of our diplomatic presence overseas," deputy State Department spokeswoman Marie Harf said yesterday.
Abstract artist Scully, who became an American citizen in 1983, lives in New York and has twice been nominated for the prestigious Turner Prize.
"Where we can promote cross-cultural understanding... We think that's a good use of our limited resources," Harf told journalists.
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The State Department requested some USD 2.5 million for the 2013 program which is a public-private partnership involving 20,000 participants including artists, galleries and museums.
Separately, the daily Washington Times accused the diplomatic service of embarking on a September spending spree to buy USD 180,000 of alcohol for its embassies.
The splurge came just as the US fiscal year was ending and a government shutdown began.