The black taffeta dress worn by Princess Diana on her first official appearance with Prince Charles after the announcement of their engagement was sold for £192,000 ($276,000) during an auction in London on Tuesday.

Auctioneer Kerry Taylor described the dress as "iconic" and expected it to sell for £30-50,000.

It was part of a collection of clothes being put up for sale by designers Elizabeth and David Emanuel and was purchased by Fundacion Museo De La Moda, a fashion museum in Chile.

"As the weeks before her wedding progressed, Diana lost so much weight that she returned the gown to the Emanuels to have it taken in," Taylor said in a statement.

"The alterations required were so drastic that they decided it would be easier to re-make a smaller version for her. They kept the original and forgot about it -- only re-discovering it quite recently."

The 30 lots on offer totalled to £282,720 ($407,000).

"The high prices that we saw today reflect the enduring love affair with Princess Diana," Taylor added.

Fundacion Museo De La Moda's founder Jorge Yarur said that when he dies, he wants the taffeta dress and the other Diana dresses he owned to be donated to Kensington Palace, where the princess lived wen she got married until her death in 1997.

A selection of Diana's dresses are already displayed in the palace's Royal Ceremonial Dress Collection.