The 9-by-8 foot artwork titled "Flower Girl" sold for $209,000 at Julien's Beverly Hills Gallery on Thursday. The winning bid came from a Los Angeles buyer who requested anonymity.
The mural shows a little girl holding a flower basket under a surveillance camera planted atop a tall stalk. The work was painstakingly removed from its original location and placed in an aluminum frame.
The seller of the piece, Eytan Rosenberg, is a former gas station owner who allowed a group of three street artists to paint something on the business's white brick wall.
Rosenberg sold the gas station last year and says he and his sister want to use the money from the sale to build a car wash.
Banksy, whose identity remains a mystery, began his career spray-painting buildings in Bristol, England. He's known for his silhouetted figures and spray-painted messages.
The highest known price for a Banksy work is about $1.1 million for a mural called "Slave Labor" that was auctioned in London in June.
Banksy's work has caught the eye of A-list Hollywood celebrities such as Brad Pitt and Angelina Jolie, who recently bought a smaller piece for $1 million.
The Associated Press contributed to this report.