Painted in 1972, before the artist lost his eyesight, Grandma’s Sunday Walk was estimated at AUD$1.8m-2.2m. The oil on canvas, measuring 75cm x 126.5cm, was billed by the auctioneer as "Drysdale's masterpiece".
Drysdale's previous highest price was for the portrait Rocky McCormack, which sold at Sotheby’s in 2008 for AUD$1.9m.
The picture was part of the 250-lot collection belonging to the Hickinbotham family of Adelaide which was auctioned by Mossgreen.
Dancing Children by Drysdale sold for nearly AUD$272,000 at the same auction.
Drysdale, who was born in Sussex to an Anglo-Australian family who emigrated down under when he was 11 years old, is known for his depiction of the Outback and its inhabitants.
The artist suffered poor eyesight for most of his life but nonetheless studied art in Melbourne, London and Paris.