An Austrian art gallery has sold a painting by Egon Schiele for a record amount in order to fund a compensation payout to the owners of another of the artist's works which was looted by the Nazis in the 1930s.

The painting Houses with colorful laundry (Suburb II), completed in 1914, fetched almost £25 million at a Sotheby's sale this week. The buyer was not named.

The money will help the Leopold Museum in Vienna afford the £12 million they agreed to pay to the descendants of Lea Bondi Jaray, a Jewish woman who said Schiele's 1912 work Portrait of Wally had been stolen from her by a Nazi agent in the run-up to the Holocaust.

The Leopold Museum's Peter Weinhaupl said he was "extremely pleased" with the amount the painting was sold for. He added that the money would "allow the museum to move forward with its goals".