The 5.2cm (two inch) solid silver Declaration Pound dates from 1643, a year after the English Civil War broke out.
It was struck in Oxford, at a new mint created to launch an official currency under Royalist control.
The coin's owner, from Dorset, took it into a Dorchester auction house, unaware of its significance.
Timothy Medhurst, a coin specialist at Duke's Auctioneers, said: "The coin has been handed down through several generations to the current owner, who had no idea of its value.
"It is a coin which is rare to find and it will cause a stir in the coin collecting world."
Its owner does not know how long it has been in their family or where it originally came from.
The coin marks Charles I's attempts to regain his failing power from the Parliamentarians led by Oliver Cromwell.
A legend inscribed on the back of the coin in Latin reads: "Let God arise and let his enemies be scattered".
It is seen as a declaration of the king's power and his belief in absolute monarchy.
The coin will be auctioned at Duke's on 12 March.
According to the National Archives, £1 in 1640 would have been worth £85.80 in 2005.

Five windows, including door panels, were smashed at Strawletterdallon Orange hall, near Newtownstewart in an attack discovered on Wednesday night.
Police described it as a sectarian hate crime.
The Orange Order said more windows were smashed at about 19:00 GMT on Thursday. The same hall was damaged five years ago in an arson attack.
The damage to the hall discovered on Wednesday is thought to have been caused during the previous night.
Inspector David McIlwaine said that the damage was caused to the rear of the building.
An Orange Order spokesman described those responsible as "mindless thugs intent on causing community division."
He said: "This was an act of wanton vandalism with the clear intention to cause damage and destruction to Orange property.
"However, the culprits are actually harming the wider community and groups who use the hall as a social hub and meeting place."
The Orange Order said that last year nine halls were targeted.

President Uhuru Kenyatta and Prime Minister Hailemariam Desalegn agreed the deal in the border town of Moyale.
The deal aims to tackle youth unemployment by creating jobs in the energy, mining and livestock industries.
Tensions between rival ethnic groups have risen due to lack of land and water.
There was a heavy security presence ahead of the meeting on the Kenya-Ethiopia border.
"This is a historic function," Kenya's President Kenyatta was quoted as saying.
He said a tarmac road would be built by September 2016, linking the two countries' capital cities.
Cross-border raids have forced thousands to flee their homes in recent years.
An "extremely rare" £1 coin is expected fetch up to £50,000 when it is auctioned off.
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An Orange hall in County Tyrone has been attacked for the second time in two days.
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Kenya and Ethiopia have signed a UN-backed trade deal worth $200m (Â£130m) in a bid to ease cross-border conflict.