The late music icon - who chocked on his own vomit and died at the age of just 27 in September 1970, and was one of the first rock stars to join the famous cult 27 club - used the popular instrument after being discharged from the army in 1962 and when he performed for acts including the Isley Brothers.
The classic piece went under the hammer at GWS Auctions and was only expected to fetch £38,000 ($50,000), but it sold for £138,000 ( $180,000), plus fees, meaning the total spent on the sought-after instrument by the winning bidder was £165,000 ( $216,000).
As per the description of the guitar on GWS' website, Hendrix used the instrument when he "played on the Chitlin’ Circuit with the likes of Wilson Pickett, Slim Harpo, Sam Cooke, Ike and Tina Turner and Jackie Wilson before moving to Harlem, New York in early 1964."
Hendrix's friend Mike Quashie - who influenced the 'Purple Haze' rocker's music - signed a letter confirming the electric sunburst belonged to the rock legend before his passing last year.
The listing stated that the guitar is “in well-loved condition” and was “keep it in its original state” without any strings on it.
The Hendrix sale comes just two months after Kurt Cobain's acoustic guitar from Nirvana's iconic 1993 'MTV Unplugged in New York' performance sold for a record-breaking $6 million (£4.85 million) at auction.
The 1959 Martin D-18E - which was often out of tune - was expected to fetch between $1million (£810,835) and $2 million (£1.62 million) at the online 'Music Icons' sale hosted by Julien's Auctions, but it ended up breaking the record for the most expensive guitar ever.
The priceless instrument - which was bought by an Australian businessman - succeeded the black Stratocaster owned by Pink Floyd's David Gilmour, which sold for $3.95 million in 2019, as the most expensive guitar.