The 13-inch high ornament with its distinctive pharaoh headdress was originally designed to hold the internal organs of the dead as part of the mummification process.
The canopic jar, complete with cover, was left outside in a garden in north Dorset until its owner decided to have it valued.
Experts discovered that the lid of the ornament was modelled on the face of the Egyptian god Imseti, wearing a black striped wig.
The jar was designed to hold the liver and Imseti would have protected the organ for use in the afterlife, according to ancient tradition.
The piece was dated between 1550-1069 BC and is now being sold at the auction house Duke's in Dorchester.
The owner of the ancient jar, who does not want to be named, said: "It came from an uncle who was a bit of a collector and when he died about 20 years ago it came to us.
"We didn't know what it was and we have kept it on the patio and in the shed over the years. It was just used as a decorative piece, a lump of stone.
"Then I looked at it and saw it had a face and it looked a bit Egyptian so we took it in to be valued and was told it was from ancient Egypt.
"It was a great surprise that something that had been sitting there for some time unrecognised turned out to be so old."
The ancient jar is damaged and so is not expected to sell for more than £1,000 when it goes on sale on February 5.
But Amy Brenan from Duke's said: "It is very rare to have something such as this brought to us.
"The owner had had it in his garden for about 20 years without realising what it was. It is incredible to think how old it is and what was happening in the world when this was made.
"These jars were made to hold the organs of the dead and this one was for livers and had the head of Ismeti as a lid."
There's no way I would have even