Holey dollar expected to fetch $500,000

One of only two known Hannibal Head Holey Dollars is expected to fetch $500,000 when it is sold for only the third time in its history by a Melbourne business.

A rare Holey Dollar is expected to fetch $500,000 when it's sold by a Melbourne coin house. (AAP)

Australia's rare "Hannibal Head" Holey Dollar is expected to fetch around $500,000 when it is sold for only the third time in its history.

The sale announced by Melbourne's Coinworks comes almost four years to the day that a second Hannibal Head coin was stolen from the State Library of NSW in a brazen heist that netted hundreds of thousands of dollars worth of rare coins.

The current offering was discovered in a bushranger's hoard in Tasmania in 1881 and presented to the Governor of Van Diemen's Land, Sir John Henry Lefroy, Coinworks said in a statement on Tuesday.

Holey dollars became Australia's first currency when Governor Lachlan Macquarie imported around 40,000 Spanish silver dollars in 1813 from various parts of the Spanish empire.

The Hannibal Head coin is one of what is believed to be about 300 Holey Dollars still in existence.