The song, which opened with the phrase "Goodbye English Rose", was sung by Elton John at the funeral of Diana, Princess of Wales, watched by an estimated two billion people.
The British lyricist Bernie Taupin, who rewrote the words of John's classic 1973 tribute to Marilyn Monroe, put the four-page draft up for sale. "Candle in the Wind 1997" sold 35 million copies world-wide in the two months after its release. In December John, a friend of the Princess, handed over a first instalment of $33m in royalties to the Diana, Princess of Wales Memorial Fund, set up to support her favourite charities.
Taupin's original manuscript at a single stroke brought in $442,500 that will go to the Children's Hospital Los Angeles. It was purchased by the Lund Foundation, a non-profit group set up by Sharon Disney Lund to fund programmes for disadvantaged children.
The draft included three hand-written pages with occasional crossings- out, and a final type-written version signed by Taupin and Elton.
It was offered for sale by Christie's International at Cicada, the Los Angeles restaurant owned by Taupin's wife Stephanie.
The auctioneer was Lord Hindlip, the Christie's chairman, who also presided last year over the charity sale of dresses from Diana's collection that fetched $3.3m.
Bidding began at $48,000. Taupin, who has often collaborated with John, said the bidding went "beyond our wildest dreams", adding: "I was not prepared to stay in the room while the thing was going on, but I got swept away by the whole thing. It was incredibly exciting and I've never really witnessed anything like that before."
Asked why he gave it up for sale, he said: "It's better doing that with it than letting it gather dust in a drawer. Four hundred thousand dollars for a charity that is one of the finest in the country, you can't really argue with that.
"It's an amazing, amazing charity, something that my wife and I have supported for a long time."