A masterpiece from a mystery donor will raise funds for scientific research.

The University of Sydney has received the remarkable endowment of a painting by Pablo Picasso, pledged in 2010 and presented to the institution last week. The former owner of the work, who wishes to remain anonymous, has stipulated it must be sold at auction and that proceeds be dedicated to the University’s scientific research programs.

Vice-Chancellor Dr Michael Spence praised the “extraordinary act of generosity” of the US-based donor who “was prepared to fly to Australia to personally give this painting to the University.

“This very generous and far-sighted gift is recognition of the international standing and reputation of the University of Sydney.”

The 1935 portrait entitled Jeune fille endormie(Young Girl Asleep) depicts the artist’s mistress and muse Marie-Thérèse Walter in an intimate, tranquil pose. Rarely seen by the public, it was shown in a 1939 Picasso retrospective at MoMA, New York, touring to Chicago, St Louis and Boston the following year. Its final outing was at an exhibition of works from the Chrysler Collection in 1941, before it became part of a private collection.

It is expected to fetch between $14 million and $18 million when it is...