The Sydney Cove medallion was made in 1789 from clay dug up at Sydney Cove - now known as Sydney Harbour.

The clay collected was sent back to Britain in a box to Sir Joseph Banks at the Royal Society. He sent a sample of the clay to British potter and industrialist Josiah Wedgwood for experimentation.

The artefact became a direct link to a voyage known as The First Fleet under Captain Arthur Phillip. The fleet carried more than 850 convicts and arrived in Sydney Cove in 1788, where a penal colony was established.

It marked the beginning of the European settlement in Australia.

Henry Webber designed the medallion for Wedgwood, and his principal modeller William Hackwood finished the moulds.

Wedgwood was proud of his creation and created a bespoke mark on it, which reads: "Made by Josiah Wedgwood, of Clay from Sydney Cove."

It is believed that two dozen of the medallions were produced, however only the whereabouts of 12 are known.

The medallion is being sold as part of Lyon & Turnbull's Five Centuries sale on November 16.

It is valued at between 30,000 and 50,000 pounds ($A52,800 to $A88,000).

"The medallion embodies the ingenuity of one of 18th-century Britain's leading industrialists, and it plays an important part in the history of travel and exploration, commemorating the settlement at Sydney Cove," said Katherine Wright, senior specialist at the Edinburgh auction house.

"The wonderful, crisp detail that is achieved in the design of this fine and fragile medallion is exceptional. It is a rare survivor. Given that so few are known, we anticipate international interest in this historic piece."

Australian Associated Press