Christie's said, "The painting has been withdrawn from the sale to allow the restoration process to begin".
Christie's sold Picasso's 1905 "Filllete ala corbeille fleurie" ('Young Girl With A Flower Basket') for $115m last Tuesday, making it the Spanish artists most expensive piece ever sold at auction.
It's not clear how bad the damage is to Le Marin, or The Sailor, or even how the damage occurred, but the auction house said in a statement that two outside conservators "have made recommendations for the successful restoration of the painting", reports ABC News.
"Christie's has a very high standard of care for the objects entrusted to us and we have taken immediate measures to remedy the matter in partnership with our client". The painting was restored and eventually sold for $US155 million.
For the second time in 12 years a Picasso masterpiece owned by the billionaire collector Steve Wynn has been damaged days before being sold.
Christie's added, "No further information is available at this time".
In 2006, the billionaire accidentally poked an elbow through Picasso's 1932 "Le Reve", while showing it off to guests in Las Vegas. Hedge fund titan Steve Cohen bought it from Wynn in 2013 for $155 million.
Bloomberg named Wynn - who resigned in February as chairman and CEO of Wynn Resorts after allegations of sexual misconduct - as the unidentified owner of the Picasso. Christie's said it also pulled another of his paintings from the auction: Picasso's Femme au chat assise dans un fauteuil from 1964.
Wynn had put some of his works on show in Wynn properties and talked of his holdings so there was no doubt of their ownership. Lin Wood, a spokesman for Wynn, declined to comment.