Investigators came upon the paintings during a 2011 search of an apartment belonging to the now 80-year-old son of art collector Hildebrand Gurlitt, who had bought them during the 1930s and 1940s, according to Focus.
The search was carried out because the son, Cornelius Gurlitt, was caught by customs authorities on a train from Switzerland to Munich with a large amount of cash.
The collection included many of the masters of the 20th century, among them Pablo Picasso, Henri Matisse, Marc Chagall and the German painters Emil Nolde, Franz Marc, Max Beckmann and Max Liebermann.
The artworks lay hidden amid old jam jars and junk in darkened rooms in Gurlitt's apartment in the southern city for more than half a century, the magazine said.
Gurlitt, a recluse without a job, had sold a few over the years, living off the proceeds.
His father, despite having a Jewish grandmother, had become indispensable to officials in the Third Reich because of his art expertise and vast network of contacts.
Hitler's propaganda minister Joseph Goebbels put Gurlitt in charge of selling the art, much of which the Nazi party deemed "degenerate," to foreign buyers abroad.