World Jewish Congress president Ronald Lauder will continue to own a significant work by Austrian artist Gustav Klimt after agreeing a restitution deal with the heirs of a Jewish woman who had owned it before the Second World War.

The New York Times reported that Mr Lauder – co-heir to the Estee Lauder cosmetics empire – purchased The Black Feather Hat (1910) from a Manhattan gallery 50 years ago. It has since featured in exhibitions in Mr Lauder’s Neue Galerie in New York.

It had once belonged to Irene Beran, who owned it until at least 1934, when she lived Brno, now part of the Czech Republic. She later fled Europe, travelling initially to Canada and subsequently moving to New York.

In a statement, Mr Lauder and the heirs said the painting’s whereabouts between 1934 and 1957 remained unclear. The gap in provenance, the overlap with the years of Nazi-looted art and the Beran family’s suffering during the Holocaust had motivated Mr Lauder to proceed with the restitution agreement, the terms of which were not disclosed.

“I felt it was critical to recognise the family’s previous history with this work, despite the lack of concrete documentation regarding how this painting left the Beran collection,” Mr Lauder said.

In the statement, the Beran heirs were quoted as saying that Irene Beran would have been “delighted to know that The Black Feather Hat found a home in New York, a city that had, at an important juncture in her refugee life, also been Irene’s home”.

Mr Lauder has referred to Nazi-looted art as “the last prisoners of World War II”.

In 2006, he bought for his New York gallery possibly the most famous piece of looted art, Klimt’s Portrait of Adele Bloch-Bauer, which had been restored to Adele’s niece, Maria Altmann, after a seven-year legal battle.

He paid $135 million for the painting, displaying it because Maria Altmann, who died in 2011, explicitly requested that it should not be in private hands but available for public view.