Child With A Dove is a key work in the Picasso and Modern British Art show at the Scottish National Gallery of Modern Art, which opens on August 4.
The 1901 painting is now hanging on the walls of the gallery and it is understood that the Department for Culture, Media and Sport in London will soon impose an export bar on the painting, stopping a foreign collector from buying the painting and taking it overseas.
The move comes after its owners, the Aberconway family in Wales, decided to sell the piece through the auction house Christie's, with the painting due to have an estimated guide price of £50 million.
The bar, which is expected to last up to four months, will allow museums and galleries in the UK, where it has been on display since the 1970s, the opportunity to raise funds to purchase the work.
However, it would be a struggle for the National Galleries in London or Edinburgh to buy the painting given that the effort to retain Titian's Diana and Callisto from the Duke of Sutherland almost exhausted the National Gallery in London's reserves. The National Galleries of Scotland do not have the ready funds to buy the work.
An export bar is put in place when the Minister for Culture, under advice from the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest, a body supported by the Arts Council of England (ACE), decides that cultural objects are national treasures.
Last night neither ACE nor the Department of Culture, Media and Sport (DCMS), would comment on the Picasso picture.
A DCMS spokesman said: "The details of all export applications are confidential until the minister makes an announcement."
Picasso painted the portrait of a young child clutching a dove and standing next to a multi-coloured ball in Paris in 1901.
The painting used to belong to Samuel Courtauld, the founder of the renowned Courtauld Institute in London.
In 1928, he bequeathed it to Lady Christabel McLaren of Aberconway, whose father-in-law Sir Charles McLaren was an Edinburgh-born jurist, Liberal Party politician and industrialist.
In the 1970s, the painting was loaned out to the National Gallery in London and last year it went on display at the Courtauld Gallery.
A spokesman for Christie's said: "We can confirm that we were instructed by the vendors to find a buyer for the painting."
The Picasso show runs from this Saturday to November 4. Originating at Tate Britain, the show marks the first time that the two organisations have collaborated on a major exhibition.
The show includes more than 150 works from major public and private collections around the world, including more than 60 works by Picasso.