A painting by Edvard Munch that lay hidden in a barn alongside a version of The Scream, to keep it out of the hands of German soldiers, is to be sold at auction and the proceeds split with the family of the Jewish man who was forced to sell it when fleeing the Nazis.

The monumental Dance on the Beach will be auctioned by Sotheby’s in London on 1 March and is estimated to fetch around £12-20m.

Just over four metres wide, it is an enigmatic composition featuring dancing figures and two of the artist’s greatest loves – relationships that ended in tragedy and heartbreak.

It is being sold by the family of Thomas Olsen, a Norwegian shipowner and Munch’s neighbour, who died in 1969. He had bought it in Oslo in 1934, just months after Curt Glaser, an eminent German academic, had been forced to sell it in Berlin.

Both men had been close friends of the artist, who had painted portraits of their respective wives, Henriette Olsen and Elsa Glaser.

Now, through Sotheby’s, their descendants have negotiated its forthcoming sale, putting right at least one wrong of the Nazis who, in the 1930s, included Munch among artists banned as “degenerate”.