An anonymous bidder purchased the instrument from the Heritage Auctions at $396,000, much higher than the auction house's expectation, on Saturday, reports the Rolling Stone.
"Dylan notably used the guitar while performing at George Harrison's famed Concert for Bangladesh in New York as well as in the mid-Seventies while touring with his Rolling Thunder Revue," the magazine wrote.
Former Beatles lead guitarist Harrison and legendary Indian sitar maestro Ravi Shankar organised the concert in New York during Bangladesh's Liberation War in 1971 to raise funds for the refugees who fled genocide by Pakistani forces and their local collaborators to India.
In 1977, Dylan decided to play Gibsons instead of Martins so he sold the D-28 to Larry Cragg, a noted guitar tech and musician, according to the page Heritage Auctions opened on its website for the guitar.
"According to Cragg, he has kept the guitar in a humidity-controlled environment, with loosened strings for the forty years it's been in his possession, and it has not been played since it was wielded by Bob Dylan in 1977," Heritage Auctions said of the guitar.