The Nothing Compares 2 U chart-topper (44) posed for the artwork in 2003 when artist Jim Fitzpatrick was commissioned by Dublin nightspot Lillie's Bordello.
O'Connor ended up buying painting for her bedroom but later resold it in 2005 for €15,000 - and it was then snapped up by an anonymous collector who wasn't allowed keep it.
Auctioneer Ian Whyte said: "When gentlemen buy pictures of pretty ladies without consulting their wives, they often have to return them."
The artwork, which measures 4 ft by 6 ft, will now go under the hammer again at Whyte's art auction in the RDS on November 28 with a pre-sale estimate of €10,000-€15,000. The view through the window in the artwork shows the Pigeon House area of Ringsend in Dublin which O'Connor wanted included.
Dublin artist Fitzpatrick is best known for his famous image of revolutionary Che Guevara which has been used on countless posters and T-shirts. He is a friend of O'Connor's and designed the cover of her album Faith and Courage which was released in June 2000. The painting will go on view from Saturday morning at Clyde Hall in the RDS.
Mum-of-four O'Connor recently announced she had found a lover after a two-month manhunt which even brought her to the Lisdoonvarna matchmaking festival with her two male nannies. O'Connor's third marriage broke up earlier this year and she became increasingly desperate for a date which sparked sexually-explicit outbursts on her website and Twitter account.
Sinéad O'Connor - Nothing Compares 2 U