The 473-year-old "Christ Carrying the Cross Dragged by a Rogue" had been on display at the Mary Brogan Museum of Art of and Science in Tallahassee, Florida, since March.
It was part of a collection of 50 paintings on loan from the Pinacoteca di Brera museum in Milan, Italy, for an exhibit due to close on Sunday.
Agents for the US Department of Homeland Security seized the painting after months of legal wrangling and negotiations.
According to federal officials, the painting was owned by Federico Gentili di Giuseppe, an Italian Jew living in Paris, who died of natural causes in 1940 a month before Germany invaded France. The painting and over 70 other works were confiscated and sold by the French Vichy government in 1941.
Gentili's grandchildren filed suit in 1997 to get it back but its final ownership has not yet been determined.
"Our pleadings make it very plain that we believe the heirs of Federico Gentili are the rightful owners," US Attorney Pamela Marsha told reporters outside the federal courthouse in Tallahassee.
Brogan museum officials have been cooperating with federal agencies since being told in July that the painting, which was insured for $2.5 million, may have been obtained under duress.
The piece, which authorities have identified as the work of Italian Renaissance artist Girolamo Romano, is among nearly 2,500 works of art and antiquities the Department of Homeland Security (DHS) has repatriated to more than 20 countries since 2007.
"The plundering of cultural property is one of the oldest forms of organized, cross-border crimes," said Michael Kennedy, a DHS special agent.
"It has become a worldwide phenomenon that transcends frontiers. Whether in times of war or peace, the theft and illegal sale of valuable artwork and ancient treasures is a crime against humanity."
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