Catherine Hutin-Blay, daughter of Picasso's second wife Jacqueline Picasso, says as many as 407 works by the artist have been taken.
Among the works are drawings, lithographs and catalogues created by the artist originally from Malaga in southern Spain.
In an article published in French newspaper Le Parisien, Hutin-Blay said the thefts first came to light in 2011.
The discovery came when the Paris-basis Picasso Administration — the body which adminsters the artist's rights — informed Hutin-Blay it had discovered some of Picasso's works on sale in a private gallery in the French capital.
These turned out to be pieces Picasso's stepdaughter had inherited from her own mother.
Hutin-Blay said she "wanted to find out if the works" were there in their "filing cabinets. And they weren't!
"That triggered everything off."
The investigation that followed revealed a "well organized plot" to make off with hundreds of works created by the multifaceted artist who spent most of adult life in France.
The thefts were probably carried out between 2005 and 2007, says Picasso's stepdaughter who lives in the castle bought by the artist in the town of Vauvenargues in the southern French region of Provence.
But the story doens't end there.
Le Parisien also reported that works by Picasso were taken from Hutin-Blay's next door neighbour in Vauvenargues: Sylvie Baltazart-Eon, the 58-year-old daughter of Picasso's art dealer Aimé Maeght.
According to the French paper, a conman named Freddy Munchenbach carried out "unspecified work" at Baltazart-Eon's home before doing the same for Picasso's stepdaughter.
He is now suspected of lifting over 600 works from the homes of both women.
This include works not just by Picasso, but also by fellow Spaniard Joan Miró, the Russian Kandinksy and the Swiss sculptor Alberto Giacometti.
Munchenbach allegedly passed the artwork on to Toni Celano, a lithographer arrested in Italy in January, according to the French newspaper.
He may have then resold that art to the Parisian gallery Belle et Belle.
One of Munchenbac'hs friends has also been implicated in the thefts. That man framed and exhibited original workds by artiets including Miró in his home.
In total the value of all the works stolen from the two women could be as high as €2 million ($2.6 million).
"I'm still not on top of everything," Hutin-Blay told Le Parisien.
"The art theft squad are charming. They know a lot about art.
"I'm lucky that I photographed everything beforehand."