"Collectors had been searching for nearly 40 years and everyone had come to the conclusion that it didn't exist anymore. No one had found any Princess Leia costumes, Prop Collector Stephen Lane told The Post.
"But then I went to meet this former crew member and hanging on the back of a door in his office was this ratty old plastic bag - and balled up in the bottom of the plastic bag was the dress. It was in really poor condition but instantly recognisable, because of the belt.
"When I was first told about the dress, I simply couldn't believe it. I've been collecting for 30 years and I think it's one of the most exciting finds of my career."
After being carefully restored across a ten-month period and at a cost of thousands of dollars, the silk dress was returned to its former glory, and will now be rehomed by Stephen in a movie auction his company Propstore is running next month.
It is expected to fetch between $1 million and $2 million, however, given its notoriety, it could be sold for much more.
Currently, the most expensive dress to ever be sold at an auction is Marilyn Monroe's white subway grate dress, which was sold for a whopping $4.6 million in 2011.
To place a bid or read more about the auction click here.