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The incident took place in Dasarathapur area in the district over a week ago.
The matter came to light when the child’s mother later changed her mind and approached the police to rescue him, a police officer said.
Struck by penury and the birth of their third child, the couple allegedly sold their newborn for Rs 7,000 through a middleman, he said.
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“The baby is currently in the custody of a government-recognised organisation Childline, and police are probing the case,” coordinator of Childline, Barendra Krushna Das, said.
The child will be produced before the Child Welfare Committee for the next course of action, Das said.
“We are also trying to trace the middleman who is on the run after the incident came to the fore,” said S K Patra, Inspector-in-Charge of Jajpur Town police station.