The 2008 Himalaya Birkin, with an 18-carat white gold diamond encrusted lock, exceeded its list price of 100,000-150,000 pounds on Tuesday, reports the BBC.
The record for a bag sold at auction - also a Hermes Birkin - is $380,000, set in Hong Kong in 2017.
It is the "undisputed most valuable bag in the world", auction house Christie's said.
It was first time the bag had been offered in a European auction, said Matthew Rubinger, international director at the auctioneers.
The niloticus crocodile bag was said to be in "grade 2 condition" with no obvious flaws.
It measures just 30 cm wide - smaller than the original Birkin handbag - and is made from nilo crocodile hide and features diamonds.
Its name refers to the colour gradient, said to resemble the snow-capped hills of the Himalayas.
A 2006 blue version of the handbag sold for $133,608 at the same auction on Tuesday, the BBC reported.
New Birkin bags can start at around $9,350 each, but they are not easy to buy, with famously long waiting lists.
The French luxury fashion house Hermes designed what became known as the Birkin in 1981.
Named after the singer and actress Jane Birkin, it has become one of the most sought-after accessories in the world, but it began as a quest for the perfect holdall.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
