Police in Munich have discovered a huge collection of major artworks thought to have been confiscated by the Nazis during the 1930s and '40s.

The 1500 artworks, which include pieces by Matisse, Picasso and Chagall, could be worth up to $1.4 billion according to news magazine Focus.

The discovery was made when police raided a house belonging to the reclusive son of an art dealer under suspicion of tax evasion.

Other artists with works featured in the collection include many of the great 20th-century masters such as German painters Emil Nolde, Max Beckmann, max Liebermann and Franz Marc.

The works were kept in darkened rooms in the house and police say the man would sell them one at at time whenever he needed money.

The Nazis seized an estimated 100,000 paintings and other works of art from the homes of Jews in France between 1940 and 1944.