The book, which has languished in the library of Mount Stuart House on the Isle of Bute for more than 100 years, was confirmed as genuine by Emma Smith, Professor of Shakespeare Studies at Oxford University.
Published in 1623, the First Folio brought together the majority of Shakespeare’s plays and without it there would be no copies of more than half of them, including Macbeth or The Tempest.
The confirmation brings the total known number of copies to 234 ahead of the 400th anniversary of the playwright’s death on April 23.
Mount Stuart House’s copy belonged to Isaac Reed, a well-connected literary editor working in London in the 18th Century, Professor Smith confirmed.
A letter from Reed shows that he acquired the Folio in 1786 and further records indicate it was sold after Reed’s death in 1807 to a “JW” for £38.
After this sale there are no public records of the Folio and it was not included in Sidney Lee’s 1906 census of First Folios.
It was at some point between these two dates that Mount Stuart acquired the Folio because it is mentioned in a catalogue of the Bute library in 1896.
The Mount Stuart edition is unusual because it was bound in three volumes with many blank pages which would have been used for illustrations.
Professor Smith said: “When we think of Shakespeare we usually think of his plays being performed on stage.
“But the written word and the First Folio is central to our understanding of Shakespeare.
“I hope this anniversary year encourages people to reread the texts of his work.”
The discovery will form the focal point for a new education programme and will go on display from April 7 at Mount Stuart House as part of an exhibition that will run until October 30.
Head of collections at Mount Stuart House, Alice Martin, said: “In terms of literary discoveries, they do not come much bigger than a new First Folio, and we are really excited that this has happened on Bute.”