The late artist Lucian Freud has expressed his gratitude to Great Britain for welcoming his family when they arrived in the country as refugees, by leaving a treasured Corot portrait to the nation under the Acceptance in Lieu scheme.

Freud was born in Berlin, but moved with his Jewish family to London in 1933, aged 11, in order to escape the rise of Nazism. He became a British citizen in 1939 and went on to become one of the finest painters the UK has seen during the last century. He died aged 88 in July 2011.

Freud purchased L'Italienne ou La Femme à la Manche Jaune (The Italian Woman, or Woman with Yellow Sleeve) by Jean-Baptiste Camille Corot (about 1870) at an auction in 2001, and hung the work on the top floor of his London home. In his will, Freud specified he wanted to leave the painting to the nation under the Acceptance in Lieu (AIL) scheme and for it to have its new home in the National Gallery as a thank you to the country which welcomed his family so warmly and where the painting could be enjoyed by so many over future generations. The Corot has been allocated to the National Gallery by Arts Council England under the Acceptance in Lieu scheme, which allows people to transfer works of art and important heritage objects into public ownership in lieu of inheritance tax.

'L'Italienne ou La Femme à la Manche Jaune (The Italian Woman, or Woman with Yellow Sleeve)' has not been exhibited in public for more than 60 years (it was last seen in a show at the Louvre, Paris in 1962). It was previously owned (1937-1957) by Hollywood Golden Age star Edward G. Robinson, famous for his gangster roles in films such as 'Double Indemnity' and 'Key Largo'.

National Gallery Director, Dr Nicholas Penny observed that "This painting is a great addition to the National Gallery where, although we have a very strong collection of Corot’s works, we have no examples of a late figure painting of this kind. Its rough-hewn monumentality and abrupt transitions anticipate Picasso’s exercises in the classical manner and make it one of the most modern looking paintings in the Collection. Freud was a frequent visitor to the Gallery and had an exact idea of the impact that this bequest would make."

Culture Secretary Maria Miller said: “The Acceptance in Lieu scheme has, over the years, seen a vast array of stunning items enter our national collections, and I am delighted that these magnificent works by Corot and Degas will now be on permanent public display where they can be enjoyed by all.”

Alan Davey, Chief Executive, Arts Council England, said: “The Acceptance in Lieu scheme is a great success story for this country’s cultural heritage and for the audiences who enjoy it. The scheme has seen thousands of important pieces of art made available for public display, attracting audiences from near and far, and inspiring budding artists – just as Lucian Freud was clearly inspired by these wonderful pieces by Degas and Corot.”

'L’Italienne' dates from the last years of Corot’s life, and was painted in his studio in Paris. The painting depicts a distinctive looking woman, turning away and gazing into the distance. Highly detailed and exquisite in its craftsmanship, the painting is a fantastic example of Corot’s later works – where he often painted peasant figures, drawing upon the heroism of mythological paintings.

The National Gallery’s collection currently has 20 paintings by Corot, ranging from a sketch made during his first trip to Italy to a ‘souvenir’ landscape of 1874. In addition it has on loan from the Loyd Collection the late, great decorative panels The Four Times of the Day.

'L'Italienne ou La Femme à la Manche Jaune (The Italian Woman, or Woman with Yellow Sleeve)' will go on display in Room 41 of the National Gallery on Monday 4 February 2013. It is one of four of works of art from Lucian Freud’s estate which go on public display today – three bronze sculptures by Edgar Degas have been temporarily allocated to the Courtauld Gallery. All have been gifted to the nation by the Lucian Freud estate under the Acceptance in Lieu scheme.

Born in Paris on 17 July 1796, Corot was the son of a cloth merchant and a milliner. After an education at the Collège de Rouen and two abortive apprenticeships with drapers, at the age of 26 he was given the financial freedom to devote himself to painting. He first studied with the landscapist Achille-Etna Michallon , and after his death with Jean-Victor Bertin, both pupils of Pierre-Henri de Valenciennes.

In 1825 to 1828 Corot made the trip to Italy considered so essential to the formation of a landscape artist, spending time in Rome and the Campagna, before travelling to Naples. In 1827 he sent his first paintings to the Paris Salon.

Corot travelled extensively in Europe throughout his life, and during these trips he painted in the open air and filled numerous notebooks with drawings. His early oil sketches were clearly defined and fresh, using bright colours in fluid strokes. During the winter months he worked in the studio on ambitious mythological and religious landscapes destined for the salon. His reputation was established by the 1850s, which was also the period when his style became softer and his colours more restricted.

In his late studio landscapes, which were often peopled with bathers, bacchantes and allegorical figures, he employed a small range of colours, often using soft coloured greys and blue-greens, with spots of colour confined to the clothing of the figures. His influence on later 19th-century landscape painting, including the Impressionists, was immense, particularly in his portrayal of light on the landscape.