With an estimated price of $US40 million to $US60 million ($A62million-$A92 million), El sueno (La cama) - The dream (The bed) in English - might surpass the top price for a work by any female artist when it goes under the hammer.
That record stands at $US44.4 million, paid at Sotheby's in 2014 for Georgia O'Keeffe's Jimson Weed/White Flower No. 1.
The highest price at auction for a Kahlo work is $US34.9 million, paid in 2021 for Diego and I, depicting the artist and her husband, muralist Diego Rivera.
Her paintings are reported to have sold privately for even more.
The painting up for auction depicts Kahlo asleep in a wooden colonial-style bed, wrapped in a golden blanket embroidered with crawling vines and leaves.
Above her, seemingly levitating atop the bedposts, lies a full-sized skeleton.
In its catalogue note, Sotheby's said the painting "offers a spectral meditation on the porous boundary between sleep and death".
Last exhibited publicly in the late 1990s, the painting is the star of a sale of more than 100 surrealist works by artists including Salvador Dalí, Rene Magritte, Max Ernst and Dorothea Tanning.
They are from a private collection whose owner has not been disclosed.
Kahlo vibrantly and unsparingly depicted herself and events from her life, which was upended by a bus accident at 18.
She started to paint while bedridden, underwent a series of painful surgeries on her damaged spine and pelvis, then wore casts until her death in 1954 at age 47.
"The suspended skeleton is often interpreted as a visualisation of her anxiety about dying in her sleep, a fear all too plausible for an artist whose daily existence was shaped by chronic pain and past trauma," the catalogue notes.
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