The piano is estimated to fetch between £600,000 and £800,000 ($950,000-$1.24 million) when it goes on sale on September 29th.
Swedish pop foursome Abba dominated the 1970s disco scene with their catchy, finely-crafted songs.
“The opening piano glissando from 'Dancing Queen' is one of the most distinctive sounds of the 1970s and we are delighted to offer the actual instrument used by the legendary Abba in their major recordings,” said Sotheby's expert Philip W Errington on Thursday.
“The piano itself is an instrument of real importance and with the added Abba provenance we expect it will have worldwide appeal,” he said.
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It was built by the inventive Swedish musical instrument designer Georg Bolin for the US jazz pianist Bill Evans. The New York Times described it in 1964 as a “space-age piano”.
Bought by Stockholm's Metronome Studios in 1967, it appeared on nearly all of Abba's recordings between 1973 and 1977.
It featured on hits including 'Dancing Queen', 'Waterloo', 'SOS', 'Knowing Me, Knowing You', 'Mamma Mia', and 'Ring Ring'.
“The Bolin Grant, one of a kind and a great source of inspiration while working in the studio during the Abba sessions,” said the group's pianist Benny Andersson.
The foursome – Andersson, Björn Ulvaeus, Anni-Frid Lyngstad and Agnetha Fältskog – went their separate ways in 1983 and have never performed together since.
The piano is being sold by Atalntis Grammofon, formerly the Metronome Studios.
Famous pianos have earned huge sums at previous auctions. In 2000, John Lennon's Steinway upright piano, on which he composed 'Imagine', was bought for £1.67 million by the singer George Michael.
The upright piano which featured in Rick's Cafe Americain in the 1942 film 'Casablanca' was sold in 2014 for $3.4 million.