Australia's first ever banknote is scheduled to go on sale and expected to generate some $3.5 million for its current owner.

Printed 100 years ago, Sydney dealer John Pettit, a private coin and note dealer bought it in 2008 for just under $2 million, but by then already the highest ever paid for an Australian banknote or coin.

The 10 shilling note was discovered 12 years after Judith Denman died in 1987, which was tucked away in a book in England in 1999.

Ms Denman was the daughter of then governor-general Lord Denman, who along with then prime minister Andrew Fisher, first issued the note on May 1, 1913, in Melbourne. It was Ms Denman who hand-numbered the note, with the serial number M000001. She was only five years old then.

Melbourne dealer Coinworks, which is handling the sale, said they expect the banknote to fetch $3.5 million this time.

"Yes, it's a banknote, but I regard it as an important piece of Australian. It really does reflect a period in Australian history I think we can actually be enormously proud of," Belinda Downie, Coinworks chief executive, said.

"It is one of our most important pieces."

She's given a six-month period to sell off the note.

"The one thing about a top, top, top rarity is you have that potential to take price leaps," Ms Downie said. "When you buy a coin for $1 million, it doesn't necessarily go to $1.1 million the next year. It might sit at $1 million, but then might go to $1.2 million or $1.3 million because something's been happening."

"Someone will buy this note. It is highly historic. Historic pieces have their place."