Two renaissance oil paintings taken from a Jewish family by the Nazis have been returned in a ceremony attended by California Governor Arnold Schwarzenegger.

Arnold Schwarzenegger with the two paintings being returned

The 16th-century works – a portrait of a man with a book believed to be painted by Venetian artist Giovanni Cariani and a portrait of a nobleman attributed to the school of Venetian master Jacopo Tintoretto – were handed back to the grandchildren of the Berlin couple who were forced to sell them in 1935.

The paintings have been on display as part of a state-owned collection in California for decades.

They belonged to Jakob and Rosa Oppenheimer, two art dealers who were forced to liquidate their Berlin gallery following Nazi demands that Jewish citizens report their assets to the government. Jakob Oppenheimer died in 1941 in France, where the couple had fled, and his wife later died at the Auschwitz concentration camp in Poland.

Governor Schwarzenegger, who attended the handback ceremony, said the theft of the Oppenheimer's paintings was "the beginning of far greater offences against the innocent and against humanity" by the Nazis, adding that "a wrong cannot be fully righted when the victims have long since passed away."

The return of the paintings to two Oppenheimer grandchildren, 73-year-old Peter Bloch of Florida and 73-year-old Inge Blackshear of Argentina, was the United States' 25th settlement involving repatriation of artwork taken from Jews by the Nazis, according to Erik Ledbetter, director of international programs and ethics at the American Association of Museums.

The paintings were spotted by Eva Sterzing, the family's Paris-based lawyer who saw a 1976 pamphlet featuring artwork at the castle built by newspaper publisher William Randolph Hearst. Museum officials were reviewing the collection in 2007 when they were contacted about a possible claim.

Hoyt Fields, director of the Hearst Castle museum, said three paintings were purchased in 1935 from the I S Goldschmidt Gallery in Berlin. He said Hearst was probably unaware of their origin.

The paintings became state property 1972 when the castle and its contents became part of the state park system.

Photographic reproductions of the two returned paintings will be put on public display instead.

Mrs Blackshear, who moved to Argentina with her family when she was five, said the heirs planned to sell both works and split the proceeds.

"With this, my grandchildren will be able to go to a very good school, and I am so happy and so thankful," she said.