Investigators searched the apartment in an upscale Munich district in February 2012, as part of a tax investigation that started with a routine check on a Zurich-Munich train in late 2010.
Authorities said they found 121 framed and 1,285 unframed works -- including by 20th-century masters such as Pablo Picasso, Max Liebermann and Ernst Ludwig Kirchner and earlier works by artists including Henri de Toulouse-Lautrec, Gustave Courbet, Auguste Renoir and Canaletto. The oldest work dates back to the 16th century.
Prosecutor Reinhard Nemetz told reporters in the Bavarian city of Augsburg that investigators have turned up "concrete evidence" that at least some of the works were seized by the Nazis from their owners or classed by them as "degenerate art" and seized from German museums in 1937 or shortly after.
"Degenerate art" was largely modern or abstract works by artists that the regime of Adolf Hitler believed to be a corruption influence on the German people. Their "deviant" characteristics were often attributed to Jewish corruption.
Officials are investigating whether the suspect in the case was in wrongful possession of the paintings. They wouldn't identify him and said they don't know where he is.
The paintings were found in one room at the apartment, where they were "professionally stored and in a very good condition," said Siegfried Kloeble, the head of the customs investigations office in Munich. He said it took a specialist company three days to remove the paintings from the apartment; officials refused to specify where they are being kept.
Kloeble said investigators "think it's unlikely that any more paintings were stored elsewhere" by the suspect.
Meike Hoffmann, an expert on "degenerate art" at Berlin's Free University who is helping the investigation, presented pictures of a selection of works from the collection.
They included a painting by Chagall that Hoffmann said isn't included in lists of the artist's work.
"These cases are, of course, of particularly high art history significance for researchers," she said. Experts haven't yet been able to determine where the Chagall came from, she added, describing the research as "very, very difficult."
Hoffmann also presented an unlisted painting by Henri Matisse, apparently dating back to the 1920s.
"When you stand in front of the works, see the ones that were long thought to have been lost or destroyed and in a relatively good state -- some of them dirty but not damaged -- you have an incredible feeling of happiness," Hoffmann said.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.