The image was taken a day after Titanic sank in the icy waters of the Atlantic, killing more than 1,500 people.
The photograph was clicked by the chief steward of steamer the Prinz Adalbert, who was at the time unaware of the tragedy that had occurred the previous day, 'BBC News' reported.
The image comes with a previously unpublished statement from the photographer.
In the statement, the chief steward describes seeing scrapings of red paint on the side of the iceberg.
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The image will be auctioned by Henry Aldridge and Son in Wiltshire on October 24 and is expected to sell for between 10,000 pounds and 15,000 pounds.
"The photograph was acquired not long after the Titanic's sinking by Burlingham, Montgomery and Beecher, attorneys for Titanic's owners, White Star Line," said auctioneer Andrew Aldridge.
"This photograph, regarded by generations of Burlingham maritime lawyers as "The Titanic Iceberg" hung on the firm's walls from 1913 until it closed its doors in 2002," Aldridge said.