Customs officials discovered the looted paintings behind rotting food at the home of an art dealer's son who collected the works.
Some were declared as degenerate by the Nazis, while others were stolen from or forcibly sold for a pittance by Jewish art collectors.
Experts have hailed the discovery, thought to have been lost or bombed, as a sensational find.
The works were bought by art historian and collector Hildebrandt Gurlitt while the Nazis were in power, but were previously believed lost during the bombing of Dresden. Art historians scrutinising the collection claim up to 300 of the Gurlitt collection appeared in a 1937 Nazi exhibition called Degenerate Art, featuring art deemed to be anti-German, including works by artists such as Marc Chagall, Wassily Kandinsky and Paul Klee. The rest were bought at "shamefully" low prices from Jews in exchange for an escape route out of the country.
It is understood there are international warrants for at least 200 of the pieces.
The artworks were found by chance in early 2011, when the tax authorities investigated Cornelius Gurlitt, the reclusive son of an art dealer in Munich.
He was suspected of tax evasion and investigators obtained a search warrant for his home. There, they found some 1500 artworks which had vanished from sight during the Nazi era.
It is believed the younger Mr Gurlitt had kept them in darkened rooms and sold the occasional painting when he needed money.
One is a portrait of a woman by French master Matisse that belonged in the collection of the Jewish connoisseur Paul Rosenberg, who had to leave behind his collection before his escape from Paris when the country fell in 1940.