The diamond was once owned by the Royal family of Hyderabad, rulers of one of the wealthiest provinces of the Mughal Empire, Christie's said in a statement.
The sale price represents a new record for any jewel sold at Christie's, surpassing the previous house record of USD 24.3 million set in December 2008 with the sale of the Wittelsbach Diamond.
Among important large diamonds, the Princie possesses all of the most desirable qualities collectors seek in diamonds: large size, desirable shape and polish, exceptional colour and quality, Golconda origins, and a noble history.
First offered at auction in 1960 as "Property of a Gentleman" - later revealed to be the Nizam of Hyderabad himself, Sir Mir Osman Ali Khan - the diamond was purchased by the London branch of Van Cleef & Arpels for a mere 46,000 pounds.
The Nizam was proclaimed as the richest man in the world by Time magazine in 1937.
The diamond's unique name was bestowed at a party at the firm's Paris store, where it was christened the "Princie" in honour of the 14-year-old Prince of Baroda, who attended the party with his mother Maharani Sita Devi.
The day-long auction also featured almost 300 jewels, including top-quality coloured and colourless diamonds, rare gemstones, natural pearls and a great selection of signed vintage creations from the best houses.
