The shipper said it was a $37 piece of art craft being sent to the United States as a Christmas present.
The feds say it was actually a stolen Picasso, missing for more than a decade and worth millions of dollars.
The work of art, painted in 1911 by the Cubist master, was recovered when it was shipped from Belgium to the United States in December.
It was discovered by U.S. Customs and Border Patrol and seized by Homeland Security Investigations.
"A lost treasure has been found," Loretta Lynch said, U.S. Attorney for the Eastern District of New York.
Lynch filed civil action to gain possession of the painting.
It will be returned to the French government, which owns the painting.
The work, entitled "La Coiffeuse" ("The Hairdresser"), was discovered missing in 2001.
The French received a loan request and when someone went to get it out of storage at the Centre George Pompidou, the painting was gone.
In December, the painting came to the United States.
The label said, "Art Craft / 30 E / Joyeux Noel."
Customs officials investigated further and found something worth far more than 30 Euros.
Deputy Special Agent in Charge Anthony Scandiffio of the Homeland Security Investigations said: "The recovery of the La Coiffeuse sends a strong message to thieves that the market to sell stolen antiquities in the United States is drying up."
The news release from Lynch didn't give the name of the person who shipped the painting.