Princess Diana wearing a strapless bodice made of draped and tucked silk at the Cannes film festival in 1987.
The silk chiffon evening dress is among 79 dresses that Diana auctioned off for charity at Christie's in New York in June 1997, just two months before she died in a car crash in Paris.
The dress, a strapless bodice made of draped and tucked silk designed by Catherine Walker, is one of four of Diana's dresses owned by the WE television network and was due to go on sale on eBay on Sunday, the New York Daily News reported.
The bidding was to start at around 300,000 dollars and proceeds from the sale were to go to America's Promise Alliance -- a charity dedicated to helping disadvantaged children stay in school, the report said.
"Princess Diana is one of the most beloved icons of the 20th century, not only because of her beautiful style but also her role as a mother and her dedication to charity," Kim Martin, general manager of WE TV, told the paper.
The network originally bought the dress for under 100,000 dollars.
"We'd love for the person who buys the dress to be somebody who recognizes all the great things that Princess Diana stood for. And hopefully, their goal is to keep Diana's spirit alive," Martin said.
The auction is due to end on August 22, according to the report.