Sotheby's will offer a newly surfaced landscape by the German Renaissance painter Albrecht Altdorfer at its Old Masters Evening Sale in London on 9 December, with an estimate of £3 million to £5 million. The panel, painted around 1520, shows a thickly wooded landscape beneath a rainbow and a densely clouded sky, with a distant castle perched on a rocky outcrop beyond the rain-wet forest.

The picture came to light in a Swiss private collection and had never been recorded by Altdorfer scholars. It does not appear in the artist's catalogue raisonné, and it is only the third oil landscape by him known to survive. The other two are both in museums: one hangs in the Alte Pinakothek in Munich and the other in the National Gallery in London. Altdorfer, who was born in Regensburg in 1480 and died there in 1538, is regarded as one of the first artists to paint landscape as a subject in its own right, drawing on the mixed woodland along the Danube downstream from his home city.

The present owner inherited the work from his father, who bought it in 1957 from the collection of the Austrian noble House of Harrach. Painted on parchment and later laid down on a wooden panel, it is the smallest of Altdorfer's three known landscapes and is signed. Sotheby's head of old masters, George Gordon, described adding to the known work of a Northern Renaissance master as among the most exciting discoveries possible in the field.

Pricing the picture proved difficult, Gordon said, because no Altdorfer has appeared at auction since 1980, when the National Gallery paid a reported £2.4 million for Christ Taking Leave of His Mother, then one of the highest prices ever paid for a work of art. He added that the landscape could exceed its estimate and that museums were likely to take an interest. Sotheby's will show the painting in New York from 7 to 19 November and in London from 4 to 9 December.