The ceramic piece was identified earlier this year after it was put up for a sale.
An art historian with Hampstead Auctions, Beth West, noticed a number of red flags while researching the artifact, which prompted her suspicion, she said.
"I noticed that drawn on the base of the figure was a registration number for a museum, thereby denoting that it was part of a collection."
After she contacted the Art Recovery Group, a London-based company that focuses on art repatriation, the process of identifying the item began.
The director of Colombia's National Museum, Daniel Castro Benítez, confirmed the artifact had indeed been part of a collection on display in the museum.
But the museum in Cartagena has no record how the sculpture disappeared in 1939.
Older than the Spanish conquest
Distinctive ceramic figures such as these were made by the people who inhabited the hills and valleys of the Cauca River during the centuries prior to the Spanish conquest in the 1530s.
Known as slab figures, most were male and ranged in height from four to 20 inches.
The septum of the recovered artifact is pierced to hold a now-missing nose ring, likely one of gold.
Christopher Marinello, CEO of Art Recovery Group, said while the worth of the piece is estimated at below £10,000 ($13,000), its recovery is still quite significant.
"While it is not hugely valuable monetarily, it is quite symbolic of the material that has been stolen from Latin America," he said.
A government official may have had the artifact before it was recovered, he said.
"The story told is that the man who had it in his possession received it as a gift from his Colombian girlfriend's father in 1999. Her father was a very important government official. This is the story we were told," Marinello said.
The vendor, who wishes to remain anonymous, is said to have had no knowledge of the significance of the artifact until earlier this year, and has agreed to the unconditional return of the sculpture to the Colombian authorities.
The work was officially returned at a small ceremony at the Colombian Embassy in London earlier this month.