Priced at €350,000 the 13th-century statue of Italian saint Margarita, made by the Spanish sculptor José de Mora is believed to have come from Our Lady of the Angels convent in Granada.
A member of the public made a complaint to the police after seeing the statue in the catalogue of a well-known Spanish dealer.
The sale of church valuables is illegal in Spain unless by the state. Mother superior, Sister Josefa told Spanish newspaper El País: "In the convent there was no such image with that title," and said the one for sale had been confused with a statue of St Rose of Viterbo, which was still there.
Some of the convent's artefacts, including statues and a processional altarpiece, surfaced last year at a flea market in Madrid.
The nuns said they had been sent for restoration, but local residents said they recognised the statue, which is described in detail in a guide to the city's heritage.
The dealer, Nicolás Cortés told El País he bought the effigy from a private individual for €100,000, "I wouldn't dream of going to a convent to buy, because it's illegal.
"I didn't know the nuns were selling works of art."
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