Samuel Hartveld and his wife were among those escaping Nazi persecution when they left Antwerp, leaving behind a number of belongings including the oil-on-canvas work, Aeneas and his Family Fleeing Burning Troy.
But, following a review by a British advisory body that looks into claims of Nazi theft, the government ordered the painting to be returned to Hartveld's heirs and great-grandchildren.
The 1654 artwork by English painter Henry Gibbs depicts the mythological story of Aeneas, a Trojan hero, escaping with his family after the Greeks invade Troy using the trickery of the Trojan Horse.
Bought by London's Tate Britain gallery in 1994, the painting will change hands once again after the independent Spoliation Advisory Panel approved its repatriation following a review that began last May.
The 10-member panel was set up in 2000 to consider claims from anyone of lost cultural property during the Nazi era that is now in a British public collection.
"The property, library and the paintings in (Hartveld's) gallery were looted as an act of racial persecution," the panel said in its recommendation, adding that the legal and moral arguments for returning the painting were "obvious".
A 2009 law allows British institutions to return objects related to the Holocaust and the Nazi era, if the arts minister agrees with the panel's recommendation.
But other laws forbid Britain's biggest museums from permanently returning objects, many of which have long faced foreign repatriation demands on the grounds they were looted or forcibly taken during British colonial rule.
