When the artwork was originally hung on in Wednesbury Museum and Art Gallery in 1930, it was attributed to the pre-Raphaelite artist John Everett Millais, but due its style the majority of experts did not believe it.
But researchers have now discovered historic documents that prove the piece was actually painted by Millais at the age of 14 in 1843.
The work, which is called Boy with a Hurdy Gurdy, was thought to be worth £5,000, but would now expect to sell for £100,000.
Millais was a founder of the pre-Raphaelite movement. Frank Caldwell, Sandwell museums manager, said: "As a juvenile work it is noticeably different in style and content from mature works."