The large yellow canvas will be offered on June 27 as part of Phillips' evening sale of 20th century and contemporary art.
Basquiat's "Pink Elephant with Fire Engine" conflates a number of his artistic tropes, including bananas, pollo fritto (which translates to fried chicken) and New York taxis.
By the year of this work's creation in 1984, the young artist had already reached an apogee of success and production, holding his first ever solo exhibition at Edinburgh's Fruitmarket Gallery.
The bold canvas, which has been exhibited internationally over the last 35 years, is expected to sell for between £3 million and £4 million (around $3.8 million and $5.1 million).
This estimate is however far from Basquiat's auction record of $110.5 million, set in 2017 at Christie's New York.
"Pink Elephant with Fire Engine" will go under the hammer at Phillips in London, as part of the private collection of American baseball superstar Alex Rodriguez.
The athlete, who has been collecting artworks for a decade, is also offering Richard Price's "Mustang Painting," which carries an estimate between £700,000 and £1 million (around $890,000-1.2 million).
Proceeds from the auction will reportedly be used to help Rodriguez build an art collection with his fiancée and pop star Jennifer Lopez.
"I am starting a fresh chapter in my personal life, and after a decade of collecting on my own, I am excited to begin a new collecting journey with Jennifer. We are both committed to the arts and will continue to be great patrons together," he said in an interview with Robert Manley, Phillips' co-head of 20th century and contemporary art.
Basquiat's "Pink Elephant with Fire Engine" and Prince's "Mustang Painting" will lead Phillips' evening sale of 20th century and contemporary art, taking place on June 27 in London.
The auction marks the first time that both artworks are being offered for sale publicly. Additional information can be found at https://www.phillips.com/.