German authorities said Wednesday they would hand back more than 1,000 works seized from a Nazi-era art dealer’s son as part of a wider deal to ensure restitution to rightful owners, AFP reported.

Cornelius Gurlitt, 81, formally agreed with the German government and the southern state of Bavaria Monday to return long-lost paintings and sketches by the likes of Picasso, Matisse and Chagall to families who had them stolen during the Third Reich.

On this basis, prosecutors in the Bavarian city of Augsburg said Wednesday they would lift a confiscation order from more than two years ago for the 1,280 works that Gurlitt hid for decades in his rubbish-strewn Munich flat.

“At the time the entire collection was impounded, the Augsburg prosecutor’s office was absolutely convinced of the measure’s legitimacy,” it said in a statement, quoted by AFP.

But it said “new information came to light in the course of the investigation” which led authorities to “reevaluate the legal situation.”

The works, whose value has been estimated at hundreds of millions of dollars, were seized in February 2012 when they were discovered by chance in the course of a small-scale tax evasion investigation.

Experts have questioned the legality of the seizure order, calling it vastly disproportionate.

Prosecutors said the tax probe would nevertheless continue.

Gurlitt’s father Hildebrand acquired most of the paintings in the 1930s and 1940s, when he worked as an art dealer tasked by the Nazis with selling works stolen from Jewish families and avant-garde art seized from German museums that the Hitler regime deemed “degenerate.”

The case only came to public attention when Focus news weekly published an article on  it late last year, sparking fierce international criticism that German authorities kept the case under wraps for so long.

Following the criticism, Germany created a site to facilitate the return of the art by increasing access to images of the pieces.

In late January, World Jewish Congress (WJC) President Ronald S. Lauder called on the German government to draft a new law to ease the process of returning the art.

Gurlitt’s lawyer, Tido Park, told AFP on Wednesday that he welcomed the decision to release the works but sharply criticized “egregious flaws” in the initial order to seize the collection.

“The restoration of (Gurlitt’s) reputation is strengthened by today’s decision,” he said.

Under this week’s accord, a government-appointed international task force of art experts will have one year to investigate the provenance of all the works in Gurlitt’s Munich collection.

Artworks subject to ownership claims after that deadline will be held by a trust until the cases are resolved.

Gurlitt will be able to keep the remaining works, which are being held at an unknown location. German officials have expressed hope he will lend or donate them to a museum.

Gurlitt had said in a media interview earlier this year that he had no intention of giving artworks to potential claimants, but subsequently took on a new team of advisors and appears keen to burnish his personal legacy.