The settlement means that the antique desk can remain in Frederick II's bedroom in his Sansoucci palace in Potsdam, for which it was originally designed. Funds came from the foundation and the state of Brandenburg, but officials would not say how much it took to retain the treasure or identify the heirs.
"We paid a very high price, which was appropriate for the value of the desk," foundation director Hartmut Dorgerloh said.
The ornate rococo desk was commissioned in Paris in 1746 for the Prussian king's bedroom at Sanssouci, which was being built just outside Berlin and became a favorite place for Frederick to spend time during the summer.
The oak desk has an exotic satinwood veneer and gilded carvings. Frederick II, who earned the tribute "the Great" for turning Prussia into one of the great states of Europe during his reign, used it until his death in 1786.He liked the desk so much that he had it copied for other palaces.
Its recent history reflects the Germany's tumultuous last century.
With the fall of the monarchy in 1918 after World War I, the last German Kaiser Wilhelm II went into exile in the Netherlands and the desk ended up with a Jewish antique dealer in Berlin, according to the Prussian Palaces foundation.
With the Nazis' arrival in power in 1933, the antique dealer, Jakob Oppenheimer, went into exile in France and took the desk with him. A year later, the Nazis charged Oppenheimer a "tax" for having fled and, hoping to expedite his son's later flight from Germany, he gave the Nazi Finance Ministry the desk as payment in 1935.
Shortly after its return to Germany, the Nazis gave it back to the foundation running the palaces, and it was returned to Sanssouci.
After World War II ended in 1945, the palace in Potsdam ended up behind the Iron Curtain. Thirteen years after the fall of the Berlin Wall, in 2002, the heirs filed a claim for the piece.
Following the claim, the foundation launched an examination of its entire collection in 2003 and found that some 1,000 objects rightfully belong to other people. They include a library with more than 600 books, but also paintings, sculptures and furniture, among other things, the foundation said.
The majority is property looted by the Red Army during the war and then returned to Germany, or items seized under era of Soviet occupation after the war, the foundation said.
So far, 70 works of art have been restored to their rightful owners over the last three years, the foundation said.
The desk is currently on display at Sansoucci, which is open to the public.