The Pink Star, a huge flawless pink diamond, was auctioned for 68 million Swiss francs (€55m) in Geneva, a world record price for a gem stone, Sotheby's said.
The oval-shaped diamond, mounted on a ring, weighed in at 59.60 carats.
"Ladies and gentlemen, 68 million is the world record bid for a diamond ever bid and it's right here," Sotheby's David Bennett said to applause as he brought down the hammer in the Geneva sales room.
Sotheby's said it was still calculating the final price,which will include the buyer's premium.
The Pink Star was the star lot at Sotheby's semi-annual jewellery sale, held in a heavily-guarded hotel showroom, which followed strong Hong Kong auctions last month.
Mr Bennett, noting that its pre-sale estimate was $61m (€45m) said: "It surpassed our estimate. It's a large amount of money in itself but I don't think this stone has a price."
The previous record was held by the "Graff Pink", a 24.78 carat fancy intense pink diamond bought by Laurence Graff, the London-based jeweller known as "The King of Diamonds", in 2010 for 45.44 million Swiss francs (€33.99m at the time).
"Frankly when I sold the Graff three years ago, I thought it would be a record for a very long time. Tonight's price is really quite extraordinary three years later," Mr Bennett said.
The Pink Star was cut and polished from a 132.5 carat rough diamond mined by De Beers somewhere in Africa in 1999, according to Sotheby's, which said it had no information on the exact geographic origin.
It was first sold in 2007 and the seller wished to remain anonymous, a Sotheby's spokeswoman said.
Signature pieces by top-end European jewellers including Cartier, Bulgari and Van Cleef & Arpels fetched strong prices, especially from the Art Deco period of the 1930s.
Sotheby's sale also realised the highest jewellery sale total for a single auction in history - $199.5m (€148.2m), according to the auction house.