The woman, Shaila Patil, allegedly reached out to her friends Yogesh Gosawi and Anant Damaji to help her "sell" her infant son as she urgently needed Rs 2 lakh. The two then contacted Amar Morje who was willing to "buy" the child.
All four have been arrested by the police in connection with the case.
Inspector Harish Madkaikar of Ponda police station, who is investigating the case, said Ms Patil's kept her husband in the dark about the deal as she needed the money. Her husband was away when she struck the deal and allegedly "sold" her child. Upon his return, he lodged a complaint with the police.
A case has been registered under the anti-trafficking provisions of the Indian Penal Code, police said.
(With inputs from PTI)