The letter, written in French and dated August 8, 1955 - more than 43 years after the Titanic sank in the North Atlantic Ocean is from a French woman called Rose Amelie Icard who survived the disaster.
The letter describes scenes of "horror" and "sublime heroism" as passengers tried to escape the sinking vessel.
Icard is believed to have been a maid to a wealthy American passenger called Martha Stone, the widow of the president of Canadian telephone company Bell Cie.
The pair escaped in a lifeboat and were rescued by the Carpathia vessel before being taken to New York.
It is thought that Icard wrote the letter to the daughter of another woman whose mother also survived the disaster.
The letter, written in blue ink, is addressed to a woman believed to be called Madame Ausein, 'The Telegraph' reported.
The letter emerged after a user of the online community Reddit requested help in translating a set of letters written by Icard that he bought at an auction around two years ago.
In the letter, Icard wrote how even 43 years after the tragedy on April 15, 1912, she still had nightmares.
"Towards eleven o'clock Mrs Stone and I went to bed. Three quarters of an hour later, as the liner was cruising at full speed, a terrifying shock threw us out of bed," Icard wrote in the letter.
She later helped Stone dress and the duo went to the deck.
"At this moment we witnessed unforgettable scenes where horror mixed with the most sublime heroism. Women, still in evening gowns, some just out of bed, barely clothed, dishevelled, distraught, scrambled for the boats," she wrote.
"Firm and calm, in the throng, officers and sailors were taking the women and children by the arm and directing them towards the lifeboats," Icard wrote.
She also talked of scenes on board as wives were put aboard lifeboats, leaving their husbands on board to die with the sinking vessel.
At one point the crew sung a hymn to help lift the passengers spirits before the lifeboats were lowered, she wrote.
Icard was one of just 745 people who survived out of 2,229 passengers and crew who were on board the Titanic on its maiden voyage from Southampton to New York.