The "Peace Diamond" was found in Kono region by a Christian pastor and it has been bought by a British luxury jeweller.
Sierra Leone sold one of the world's largest uncut diamonds for $6.5 million at a New York auction on Monday to raise funds for development projects in the West African country.
The egg-sized gem, known as the "Peace Diamond," was bought by British luxury jeweller Laurence Graff, said Martin Rapaport, chairman of Rapaport Group, a network of diamond companies that managed the auction.
Of the proceeds of the stone, "the government will get 59 percent or about $3.9 million in tax revenue to fund clean water, electricity, schools, health centres and roads," Rapaport said.
The gem was unearthed in March in Sierra Leone's eastern Kono region by a Christian pastor who gave it to the government to handle the sale.
It was the government's second attempt to sell the diamond after it rejected the highest bid of $7.8 million at an initial auction in the capital Freetown in May.
Ahead of Monday's auction the diamond was shown to some 70 potential buyers and received seven bids, Rapaport said.
"We showed the diamond everywhere. We did whatever we could and that's the best price that we can get from the market today," he said.
The United Nations lifted a ban on diamond exports from Sierra Leone in 2003, though the $113 million sector is plagued by smuggling.
Diamonds fuelled a decade-long civil war in Sierra Leone, ending in 2002, in which rebels forced civilians to mine the stones and bought weapons with the proceeds, leading to the term "blood diamonds."