The palatial Miami mansion where iconic fashion designer Gianni Versace was murdered goes under the hammer on Tuesday with auctioneers hoping to clinch a sale for as much as $40 million.

Bidding for the Mediterranean-styled estate on Miami Beach’s prestigious Ocean Drive, just steps from the sea, is to start at $25 million, a Fisher Auction spokesman.

Auction organisers have said the sale has attracted interest from overseas buyers, including potential bidders from Russia and South America.

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Casa Casuarina boasts 10 bedrooms and 11 baths, mosaic flooring and an array of frescoes and murals custom-made for Versace.

Two rooftop terraces boast spectacular views of the beach and an observatory has everything one needs for an evening of star-gazing — cushions, armchairs and a bar.

Other luxury features include gold-plated bathroom fixtures and an open-air courtyard.

A suite once occupied by the designer himself contains a king-size bed, as well as a huge bathroom, a walk-in closet and even a small terrace overlooking the sea.

Versace, 50, was shot dead on the steps of the villa in July 1997 by serial killer Andrew Cunanan.

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In the wake of the murder, the Italian fashion designer’s family put the property up for sale and it subsequently changed hands in 2000 for $19 million.

Most recently, the villa has been a boutique hotel.

The mansion was built in 1930 by architect and philanthropist Alden Freeman in homage to a villa constructed in the Dominican Republic in 1510 by Diego Columbus, the son of explorer Christopher Columbus.

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Seven years later, in 1937, the house was sold to Jacques Amsterdam, who called it “The Amsterdam Palace.”

Versace bought the property for $2.9 million in 1992, in addition to the empty Revere Hotel next door. He spent $33 million on renovations.

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The villa went on sale more than a year ago for $125 million but, in the absence of buyers, the asking price dropped to $75 million several months ago, before it landed on the auction block.

[Image via Agence France-Presse]