A prized Kandinsky painting sold to Amsterdam's famous Stedelijk Museum during World War II has been returned to the heirs of its former Jewish owners, ending a nine-year-long saga, city officials said Monday.

Wassily Kandinsky's 1909 painting "Bild mit Haeusern" (Painting with Houses) was claimed by the descendants of Jewish art collector and modern art aficionado Emmanuel Lewenstein.

They said the painting was sold at auction to the museum under duress by Lewenstein's son Robert and his wife Irma Klein in October 1940, five months after Germany invaded the Netherlands.

"Today the painting... has been transferred to the heirs of the Jewish former owners," the city of Amsterdam said.

"The heirs and the municipality have, on the basis of mutual respect, reached a settlement agreement," it said in a statement.

The heirs first lodged a claim in 2013, but the Dutch Restitutions Committee -- which rules in cases of ownership of artefacts looted during Nazi occupation -- rejected the attempt.

The claim then went to the Amsterdam District court in 2020 but was turned there, too, where the judges said "serious defects did not exist in the investigation" by the Dutch Restitutions Committee.

The heirs appealed the Dutch court's ruling and in a twist, a second committee set up by the Dutch government in 2020 ruled that the issue needed to be re-assessed, leading to renewed talks between the heirs and the municipality.

Both parties now reached an agreement.

"Part of the agreement with the heirs is that there is no further litigation in the matter," Marit van Kooij, spokeswoman for Amsterdam deputy mayor Touria Meliani told AFP.

Meliani in the statement said "as a city, we bear a great responsibility for dealing with the indescribable suffering and injustice inflicted on the Jewish population in the Second World War."

"To the extent that anything can be restored, we as a society have a moral duty to act accordingly," Meliani said.

More than 100,000 Jews were deported to Nazi death camps during WWII from the Netherlands -- the majority of them living in Amsterdam.

One of the pioneers of modern abstract art, Moscow-born Kandinsky's paintings are highly sought after and fetch millions of euros (dollars) at auction.