Liebermann's "Two Riders on the Beach" was part of an art trove found in late collector Cornelius Gurlitt's apartment.
Experts last year determined the painting was seized from businessman David Friedmann and rightfully belongs to his descendants.
Culture Minister Monika Gruetters' office confirmed a report in weekly Der Spiegel Friday that she signed the agreement, the first such accord for a piece from the Gurlitt collection. The agreement reportedly must be cleared by a Munich court handling Gurlitt's inheritance.
A Swiss museum that accepted Gurlitt's bequest of his collection has promised to ensure any Nazi-looted pieces are returned to their Jewish owners' heirs.