The engine, restored over 27 years and featured in Dibnah's final BBC series Made in Britain , was last used to pull its owner's coffin through the streets of Bolton in 2004.
Bill King, director of the Cambridge-based auctioneers, said: "While the price achieved for this engine far exceeded our pre-sale expectations [of £120,000-140,000], it is testament to Fred Dibnah, his skill and knowledge of traditional engineering and, of course, his big personality, that we received so much interest."
Michael Oliver, who has offered Fred's son Jack the opportunity to drive the engine, intends to show this piece of steam engine history at steam shows across the UK.
