"Spy Booth" shows three agents in trench coats and trilby hats eavesdropping on a phone booth. It appeared in April on a wall in Cheltenham, western England, home of spy agency GCHQ.
A local group was formed to save the work after the building's owner attempted to have it removed and sold.
Local businessman Hekmat Kaveh had agreed to buy and preserve the mural, but on Friday it was covered in scrawled graffiti letters. Kaveh said he hoped the work, which was treated with anti-graffiti paint, can be restored.
Banksy works have fetched as much as $1.8 million at auction, and several of his outdoor pieces have recently been stripped from walls and sold.