The painting is a representation of the death of the Virgin Mary - a scene known as "Dormitio Virginis" - by Andrea Di Bartolo, a Sienese School painter who died in Siena in 1428.
It was stolen from the villa of Frederick Mason Perkins in Lastra a Signa near Florence in 1944 and first ended up in Canada, then Britain, the Italian news agency ANSA reported
Police are working on recovering other artwork taken from the home of Perkins, an art dealer and collector who was held prisoner in Perugia with his wife during World War II.
The painting is on display at the Pinacoteca di Brera in Milan but will then be handed over to the Catholic diocese of Assisi - the recipient designated by the Perkins family.
ANSA said the painting may have been spotted by police when it was put up for sale by a British auction house with a starting price of 164,800 pounds(€200,000, $276,000).