The trove of Nazi-looted art seized in a Munich flat included works dating from the 16th century by artists such as Canaletto, Courbet, Picasso, Chagall and Toulouse-Lautrec, German authorities say.
"A total of 121 framed and 1,285 non-framed works ... were seized," said Augsburg state prosecutor Reinhard Nemetz.
"There were oil paintings, others in Indian ink, pencil, water colours, colour prints, other prints from artists like Max Liebermann and others."
A reproduction of a painting by artist Marc Chagall A previously unknown work by Marc Chagall was among the collection found in a nondescript flat owned by Cornelius Gurlitt, the reclusive elderly son of a war-time art dealer.
The late Hildebrand Gurlitt was a specialist collector of the modern art of the early 20th century that the Nazis branded as un-German or "degenerate" and removed from show in state museums.
Investigators said they searched the apartment on February 28, 2012, as part of a tax investigation that started with a routine check on a Zurich-Munich train in late 2010.
Meike Hoffmann, art historian at Berlin Free University, said another unknown masterpiece by fellow modernist painter Otto Dix was also part of the haul.
She said the Chagall painting, an allegorical scene dating from the mid-1920s, had a "particularly high art-historical value".
A combination of two formerly unknown paintings by German artist Otto Dix The Dix work is a rare self-portrait believed to have been painted in 1919.
Augsburg state prosecutor Reinhard Nemetz told a news conference: "Regarding these artworks with an ideal value so high that it cannot be estimated, there are concrete indications that this is so called 'degenerate art' or stolen art."
Siegried Kloeble of Munich Custroms Office said: "When we investigated the matter we immediately noticed that these were classic modern works.
"Let me name a few of the artists: Max Liebermann, Max Beckmann, Otto Dix, Oskar Kokoschka, Henri Toulouse-Lautrec, August Macke, Emil Nolde, Ernst Ludwig Kirchner, Pablo Picasso, Carl Spitzweg, Marc Chagall, Renoir, Schmidt-Rottluff, Hofer."
Ms Hoffman said: "When you're standing in front of these works which for a long time were believed to have disappeared or to have been destroyed, it is an incredible feeling of joy.
"They are in relatively good condition, some of them are dirty but not damaged.
The block of flats where the loot is believed to have been found "As far as I can see, these works are of an absolutely outstanding quality, aesthetic quality but also in a good condition so they represent a huge scientific value.
"I pointed out that a lot of the works were not known at all until now.
"So this will mean a great challenge for the research on the individual artists once this case has been evaluated fully and the works can be displayed publicly."
The story of the artworks was revealed in a report by news magazine Focus over the weekend.
Focus estimated that the works found amongst stacks of hoarded groceries in the flat of Cornelius Gurlitt, could be worth well over €1bn.
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