A newly uncovered novel by the late Chilean writer Roberto Bolaño will get its first English language publication this year in the literary quarterly the Paris Review. Described by its translator Natasha Wimmer as "buoyant" and "funny", The Third Reich tells the story of a German man who is a war-gaming champion. It will be serialised in four parts, with the first out in the magazine's imminent spring issue.

A typescript of the novel was found among the writer's papers after his death in 2003. According to the Wylie Agency, which represents Bolaño's work, it dates from the 1990s and is a "completed novel that is meticulously corrected by hand".

First published in Spanish last year, The Third Reich is the story of Udo Berger, who is taking a holiday on the Costa Brava before a big war-gaming tournament, and who finds himself drawn into a battle with an enigmatic local, El Quemado (The Burned One). The Wylie Agency has described the book as "one man's descent into nightmare". But the author's long-time translator Natasha Wimmer has suggested a cheerier read, saying the novel has been a joy to work on, "mostly because Bolaño seems to have had such fun writing it. It's a buoyant novel, ominous at moments but mostly just funny."

Bolaño lived a colourful early life, dropping out of school in Chile, briefly jailed after Pinochet's coup for his support of Allende, and helping found a surrealist literary movement – "infrarealism" – in Mexico City. Later he lived a "vagabond" life in Europe and then Spain, supporting himself with menial jobs like dishwashing and fruit-picking. He took an uncompromising approach to his writing, telling his diary, "I am sure I will die unpublished", and he was already 43 before his first book appeared – dying just seven years later, of liver failure.

At that point only one of his books had been translated into English, but his international reputation took off posthumously, with Wimmer's translation of his novel The Savage Detectives, the story of a budding young poet in Mexico City with elements of Kerouac's On The Road. Later 2666, Bolaño's epic novel in five parts, telling the story of the 20th century through the life of enigmatic writer Benno von Archimboldi, brought him even more acclaim.

Over the past two years, Picador has been bringing out much of Bolaño's previously untranslated work, including Amulet, The Skating Rink and Monsieur Pain. A collection of poems, The Romantic Dogs, is due out next month.

The Third Reich is not the only Bolaño novel to be uncovered posthumously. Two manuscripts – titled Diorama and The Troubles of the Real Police Officer – were reported to have been unearthed among his papers in 2009, alongside a possible sixth section of 2666.