Sotheby's removed "Blanchisseuses souffrant des dents" ("Laundry Women with Toothache") from its impressionist art sale after France alerted the auction house that it belonged to the Louvre Museum in Paris, ministry officials told AFP, confirming information first reported in La Tribune de l'Art website.
Dating from around 1871-1873, the work was stored in 1960 at the Havre Museum in Normandy, from where it was stolen in 1973.
It features two views of a young, brown-haired laundress at work, one with her clutching a bottle, with her mouth open and a hand behind her neck.
In its auction catalogue Sotheby's estimated its value at between 350,000 to 450,000 dollars (248,000 to 319,000 euros).
A member of the Havre museum recognised the work as he was rifling through the Sotheby's catalogue, the ministry official said.
"We contacted Sotheby's which agreed to withdraw it from the auction," the official said.
"We will begin friendly negotiations with the owner who appears to be of good faith via the auction house," the officials said.
While the painting is on a museum data list in France, it does not feature on Interpol's list of stolen art.
French and US police will relaunch an investigation into its theft however via the international police organisation.
Another Degas painting disappeared from a museum in Marseille last year and has not yet been found.
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