Fangio's F1 Mercedes "could fetch over £10m" at Goodwood Auction
According to auctioneers the W196 "could fetch more than £10m when it goes under the hammer", as reported by the BBC.
The five-times world champion from Argentina, Juan Manuel Fanigo clinched his second title in the Mercedes-Benz W196, taking victory in the 1954 German and Swiss Grand Prix.
Bonhams estimates the 2.5-litre racer could possibly break the £10.8m record price set in 2011 by a 1957 Ferrari 250 Testa Rossa Prototype.
Fangios's teammate Karl Kling also drove the car in the 1955 Italian Grand Prix in Monza, but it suffered from gearbox failure.
It was then consigned to the Daimler-Benz Museum in Germany and exhibited at Le Mans in France, the British Grand Prix at Silverstone at and Hockenheim in Germany throughout the 1960s.
As far as ownership goes, the W196 was presented to the National Motor Museum in Beaulieu, Hampshire, during the 1970s before it was sold on to a private collector in the 1980s and then on to a German businessman.
A Bonhams spokeswoman told the BBC: "This is the only Mercedes-Benz W196 in private hands. It is the only surviving Mercedes-Benz W196 to have won not just one Grand Prix, but two.
"Its stature is immense, not only as the iconic Fangio car of the 1950s, but also as a shining star of pinnacle Mercedes-Benz engineering and as an icon of post-war recovery."
Motoring historian Doug Nye said: "In every area of the car, there is evidence of just the most fantastic workmanship. It was designed by very sophisticated, high-tech engineers.
"It's handcrafted and it's just like a piece of mechanical jewellery."
He added: "I always say it's sad that these things have to be sold but on the other hand, as an enthusiast, it's just a privilege to have such an iconic historic piece.
"I have been one of the stewards looking after the car for several months, and it will be quite a wrench to see it go."