Prosecutors in Germany are to release 1,280 works of art confiscated two years ago from the Munich apartment of collector Cornelius Gurlitt.
Mr Gurlitt's father bought and sold art under the Nazis, including works looted from Jewish homes and works bought from Jewish owners under duress.
The collector's lawyers accept a small portion of the works may be disputed.
But the great bulk of the trove, they say, is the collector's for him to do with as he wishes.
Mr Gurlitt has been recovering from heart surgery and it is not known how he has reacted to the decision.
The immediate likelihood is that the paintings, some by Matisse, Picasso and other masters, will remain in a secure warehouse in Bavaria while legal disputes continue but the prosecutors' decision implies he has a right to them.
A smaller number of works found at a property of Mr Gurlitt's in Austria are not affected by the German decision.
Wednesday's decision came shortly after the collector agreed to co-operate with the authorities to determine which of the paintings had been stolen by the Nazis and to enable their return.
(BBC)