A Pennsylvania museum is relinquishing a valuable 16th-century portrait attributed to Lucas Cranach the Elder and his workshop after reaching a settlement with descendants of a German Jewish couple who fled the Nazis before World War II.

The Allentown Art Museum agreed to give up “Portrait of George the Bearded, Duke of Saxony,” following a claim made by the family of Henry and Hertha Bromberg, who fled Germany in 1938.

As part of the settlement, the work, an oil on panel dated to around 1534, is to be sold at the Christie’s Old Master sale in New York in January. The proceeds are to be divided between the museum and the Bromberg heirs, but the parties have not disclosed details of the arrangement.

“This work of art entered the market and eventually found its way to the museum only because Henry Bromberg had to flee persecution from Nazi Germany,” Max Weintraub, the museum’s president and chief executive, said in a statement. “That moral imperative compelled us to act.”

Mr. Bromberg, a judge in a magistrate’s court in Hamburg, had inherited the portrait and other works from his father’s collection. But he and his wife sold off artworks as they left Europe, first traveling to Switzerland, then France before sailing to the United States in 1939. They eventually settled in Pennsylvania, not far from Allentown.