The song, called I Never Dreamed, was penned nearly a decade before the rock star graced the stage as Ziggy Stardust.
A band named The Konrads had asked a 16-year-old Bowie, then known as David Jones, to sing on their track when it was recorded in 1963.
It has been described as a “harmonious rock and roll song in the vein of classic” Beatles, and was submitted to the record label Decca in an unsuccessful bid for a contract.
The Konrads drummer David Hadfield, who found the recording in his loft, said he was the one who “decided that David was the best person to sing it and give the right interpretation”.
He added: “So this became the very first recording of David Jones (Bowie) singing 55 years ago”.
Omega Auctions in Newton-le-Willows, Merseyside, will auction the recording on 11 September.
Paul Fairweather, from Omega, said: “For Bowie collector’s this really is a significant recording, completely unique and of great historical interest, being the earliest studio recording of a fledgling musician who would go on to super stardom.”
Bowie left The Konrads shortly after the recording and did not achieve stardom until six years later when, already a solo artist, he released Space Oddity about the fictional astronaut Major Tom.
He later earned a reputation as one of the most innovative voices in rock over a half-century career that experimented with soul, disco, jazz and ambient music.
He died in 2016 from an undisclosed battle with cancer, two days after releasing his final album on his 69th birthday.