The 1,500 paintings, believed to have been destroyed in air raids, include works by Pablo Picasso, Renoir and Henri Matisse.
The discovery was hailed by a spokesman for German customs officials as “a sensational find, a true treasure trove”.
The paintings were once owned by art dealer Hildebrandt Gurlitt, who bought up the valuable works for a pittance from terrified Jews trying to flee Germany in the 1930s and 40s. He claimed his collection had been destroyed during the RAF’s bombing raids on Dresden in February 1945.
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Customs officials only made the incredible discovery after they came across Gurlitt’s last surviving son Cornelius, 80, in a routine stop on a train from Switzerland in 2010, according to this week’s edition of Germany’s Focus magazine.
They found he had empty envelopes with him which they suspected had earlier been stuffed with cash.
The officers searched his flat in Munch in spring 2011 and discovered the priceless horde behind a mountain of rotten food. Details of the discovery have only just been announced. It is believed the authorities have been checking the authenticity of the finds and trying to locate possible owners.
A customs spokesman said: “We were stunned with what we found.
“From floor to ceiling, from bedroom to bathroom, were piles and piles of old food, much of it from the 80s. And behind it all, these pictures.”
Another customs official said: “They are worth over a billion euros, we are told, but the real worth is inestimable. They are treasures.” The works include a portrait of a woman by Matisse from the collection of Jewish connoisseur Paul Rosenberg, who had to leave his art behind as he fled Paris in 1940.
His granddaughter Anne Sinclair, wife of disgraced French banker Dominique Strauss-Kahn, has been fighting for decades for the return of his pictures, but has said she “knew nothing” of the existence of this painting.
Hitler famously loathed modern art and his troops seized about 20,000 works that he disapproved of.
Cornelius Gurlitt now faces jail for tax evasion and money laundering.
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