The painting, which shows Angel Fernandez de Soto, is on display at Christie's auction rooms.
Painted in 1903, the work is part of Picasso's early "blue period" - which centred on isolation and alienation.
It will be auctioned in New York in November, where it is expected to be sold for up to $60m (£31.9m).
Such a figure would place it among the top 10 most expensive paintings ever sold.
"We are thrilled to offer a work of such stature by Picasso in our evening sale this November," said Guy Bennett, Christie's head of Impressionist and Modern Art.
"The dramatic and intense friendship of the artist and his subject makes this one of the most personal and powerful works from the Blue Period."
High price sale
Picasso met Angel de Soto in Barcelona in 1899, and the two quickly became friends, even sharing a studio in 1902.
De Soto appears in a number of images by Picasso, culminating in the dramatic 1903 portrait.
The painting is being offered by The Andrew Lloyd Webber Foundation and is being sold to benefit a number of charites.
Earlier this year, Picasso's 1941 portrait of his lover Dora Maar was sold for $95.2m (£50.6m), the second highest amount ever paid for a painting at auction.
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