The National Galleries of Scotland, the National Museums of Scotland, and National Library of Scotland are to be included in the Holocaust (Stolen Art) Restitution Bill, a Westminster bill to reverse legislation that prohibits institutions breaking up their collections.
Michael Russell, the minister for culture, said: "We must be able to act, should an instance arise, so that Scotland's national institutions are fully able to restore to their legal and rightful owners any cultural objects that were looted by the Nazis during the Holocaust. The moral imperative is unanswerable."
In recent years major international museums have had to come to terms with their collections' histories.
In 1997 France was rocked by the revelation that more than 2000 works of art looted by the Nazis had made their way into its national collections.
In April the Austrian city of Linz announced it was returning an unfinished Gustav Klimt painting, worth £13 million, to the heirs of its original Jewish owner, who died in the Holocaust.
Examples of Nazi looted art in the UK have been comparatively rare. A committee established in 2001 to adjudicate on them has handled eight cases.
The only one in Scotland was at the Burrell Collection. In 2001 lawyers representing two Jewish families approached Glasgow City Council about the painting Le Pate de Jambon by Jean-Simon Chardin. The families' relatives in Munich had to sell the artwork in 1936 to meet an unfair Nazi tax demand.
Sir William Burrell's will, however, states his collection cannot be split up. The affair was concluded in 2006 when the families accepted £10,000 for the painting to remain in Glasgow.
The new bill hopes to prevent such wrangling in the future.
Since 1999 Scotland's national collections have been scouring archives to ensure artefacts, books, and paintings were not part of the Nazi haul.
They have welcomed the loosening of the constraints on them.
Like the National Museums and the National Galleries, the National Library has yet to find any dubious artefact. But Cate Newton, director of collections and research, does not rule out the possibility.
"It is something we take very seriously, which is why we are responding with great thoroughness to this request to look through all our records from this period," she said.