Synonymous with the US musician's signature grunge style, the acrylic and mohair cardigan took centre stage at a two-day rock memorabilia auction at New York's Hard Rock Cafe.
Julien's Auctions, which was responsible for the event, described it as "one of the most famous sweaters in music history."
The intimate "MTV Unplugged" performance in New York was recorded in front of a live audience five months before Cobain's death in April 1994.
The show, which many fans regarded as being the band's best, was released as an album later that year.
Cobain's custom-built left-handed Fender Mustang guitar that he played on the band's "In Utero" tour in 1993 was also auctioned and raised 340,000 dollars.
Other famous items sold at the event included Elvis Presley's solid rosewood Fender Telecaster electric guitar and many of Michael Jackson's custom-made jackets, gloves, and hats.
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