Madonna lost a court battle to keep a trove of intimate belongings including a pair of satin panties, a brush containing her hair and a breakup letter from a former boyfriend, the late rapper Tupac Shakur, from heading to the auction block.

A New York state appeals court in Manhattan on Tuesday cleared the way for an auction, saying Madonna could not pursue claims against Darlene Lutz, her former friend and art consultant, or the GottaHaveRockandRoll.com online auction website, to which Lutz consigned the items for sale.

The Appellate Division said Madonna's claims were barred by a "very broad" release in her 2004 settlement agreement with Lutz, who was "free to do with the property as she wished" as its rightful owner.

Madonna, 60, had said she did not know until learning about the auction that Lutz, who worked for the singer from 1981 to 2003, possessed the more than 20 disputed items.

Lawyers for Madonna did not immediately respond to requests for comment. It is unclear whether she will appeal.

"The court came to the absolute right decision," Hartley Bernstein, a lawyer for the defendants, said in an interview. "The property is Ms. Lutz's to do with as she wishes."

Tuesday's 5-0 decision upheld an April 2018 ruling by Justice Gerald Lebovits of the state supreme court in Manhattan.

Lebovits said he dismissed the case because the statute of limitations had passed, and because Madonna's settlement with Lutz contained a broad waiver covering the claims.

The handwritten letter from Shakur was dated Jan. 15, 1995, while he was in prison for sexual assault.

It said he was ending his relationship with Madonna because he thought dating a white woman could jeopardise his career.

"I felt due to my 'image' I would be letting down half of the people who made me what I thought I was," Shakur wrote. "I never meant to hurt you."

GottaHaveRockandRoll.com said the letter could fetch US$400,000 (S$546,000) at auction, court papers show. Shakur was killed at age 25 in a September 1996 drive-by shooting in Las Vegas.