The Spanish artist’s 1932 picture Nude, Green Leaves and Bust was sold at Christie’s auction house in New York.
It had belonged to the late Los Angeles collectors Frances and Sidney Brody since the 1950s.
The winning bid was made by an unnamed telephone bidder. It breaks the record held by Giacometti’s Walking Man I, which sold in February for $104.3m.
Another work by Picasso, Garcon a la Pipe, had previously held the record when it sold for $104.1m in 2004.
Nude, Green Leaves and Bust had been expected to sell for $70m-$90m.