The claim was the result of research by experts at Oxford's Ashmolean Museum of Art and Archaeology, who identified the piece as looted and informed the Budge family.
The Museum had been bequeathed the piece only last year as part of an extraordinary £10m collection by the collector Michael Wellby.
The antique expert, who died in 2012, bought the piece in an Amsterdam auction at Christie's in 1994 for around $5,000.
The museum said it would return the object after a ruling by the government's Spoliation Advisory Panel.
In June the British Library and London's Victoria and Albert Museum were asked to return an estimated £200,000 of Nazi stolen art after fresh claims by Jewish heirs.
