The money from the diamond's sale would be given to Motilal Prajapati after deducting taxes and royalty.
A 42.59-carat diamond found by a man in Madhya Pradesh's Panna district in October was on Saturday sold at an auction for Rs 2.55 crore, a senior official said.
Panna's Mining and Diamond Officer Santosh Singh said the money from the sale would be given to Motilal Prajapati after deducting taxes and royalty.
Motilal Prajapati, along with four others, had taken a mine on lease in Krishna Kalyanpur area in Panna and had unearthed the diamond, the biggest found in these parts, Mr Singh said.
Motilal Prajapati plans to use the money from the diamond to educate his children.
Rahul Agrawal, a resident of Jhansi in Uttar Pradesh, bought the diamond, Mr Singh added.
The auction started on Friday with 160 diamonds with a total weight of 203 carats going under the hammer.
Meanwhile, another person Radheshyam Soni on Saturday found an 18.13 carat diamond in the Krishna Kalyanpur area of Panna, Mr Singh said.
He said Radheshyam Soni deposited the diamond with the Mining and Diamond Office and it would be put up for sale in the next auction.
Panna is estimated to have diamond reserves of 12 lakh carats.