A black woman who refused to leave the whites-only section of a Canadian movie theatre in 1946 – nearly a decade before Rosa Parks’s act of defiance – has been honoured on the country’s newest $10 bill.

Civil rights pioneer Viola Desmond was selected from the more than 26,000 submissions that rolled in after the Bank of Canada announced plans to put a Canadian woman on the country’s regularly circulating currency for the first time.

Born in 1914, Desmond rose to prominence as an entrepreneur, selling her own line of hair and skin products at a time when few local beauty schools accepted black students.

The new Canadian $10 banknote. Photograph: Handout/Reuters

After being forced to travel to Montreal, Atlantic City and New York for training, she returned to Halifax and opened a beauty school aimed at offering black people a local option for training.

The incident that would propel her into Canada’s history books took place in 1946 after her car broke down in New Glasgow, some 100 miles north-east of Halifax, while on a business trip.

Looking to kill time while her car was being repaired, she stopped by a local movie theatre. It was a segregated space – floor seats were for white people while black people were relegated to the balcony.

Desmond, who was shortsighted, tried to buy a floor seat but was refused. So she bought a ticket for the balcony, where tax on the seats was one-cent cheaper, and sat in the floor area anyway.

She remained there until police arrived. Desmond was dragged out of the theatre and arrested, ultimately spending 12 hours in jail.

The price difference between the floor and balcony seats would later come back to haunt her; Desmond was charged with tax evasion over the single penny. Despite the fact that the theatre had refused to sell her the more expensive floor seat, she was convicted and ordered to pay fines amounting to C$26.

Later attempts to fight the conviction in court proved fruitless. Desmond died in 1965 and her act of defiance – which helped ignite Canada’s civil rights movement as well as usher in Nova Scotia’s legal end to segregation in 1954 – was overlooked for decades by many in Canada.

In 2010, more than six decades after she was arrested, Nova Scotia apologised to Desmond and pardoned her – a posthumous pardon signed into law by Mayann Francis, the province’s first African Nova Scotian lieutenant-governor. “Here I am, 64 years later – a black woman giving freedom to another black woman,” Francis later told Maclean’s Magazine.

On Thursday, Desmond’s sister Wanda Robson, now in her 90s, was on hand to unveil Canada’s first banknote featuring a black person. “It’s beyond what I ever thought. It’s beautiful,” she told an audience in Halifax.

The note – which is also the first in Canada to feature a vertical orientation – is expected to enter into circulation at the end of the year. “I say thank you, thank you, thank you,” said Robson. “Our family will go down in history – in history, imagine that.”