Bailout lender Allied Irish Bank has revealed it is giving something back to the taxpayer - a Jack B Yeats masterpiece worth more than 1 million euro and 38 other valuable artworks.

The iconic painting, A Race in Hy Brazil, is among the sought after pieces valued at five million euro being donated by the bank.

Works by Sean Keating, Paul Henry, Roderic O'Conor and Walter Osborne are part of 12 major artworks being transferred to the State immediately.

They will be held and put on display by the Crawford Gallery in Cork.

Arts Minister Jimmy Deenihan said the partnership was exciting and deeply important.

"The AIB Collection is the pinnacle of wise and knowledgeable connoisseurship and as such is a valuable addition to the National Collection," he added.

Art experts said AIB - which along with ESB has got 21 billion euro from the State - was renowned for having one the finest collection of Irish art in the country.

Crawford chairman John R. Bowen, said it was privilege for his gallery to be entrusted with the custody of the works which have hung in AIB's banking centre in Ballsbridge.

"Acquired by one of Ireland's leading financial institutions, the AIB Art Collection, from its beginning, was inspired by a view and a vision of Irish life and culture that extended beyond the investment and financial business," he said.

AIB said the other 27 artworks will be transferred to the State over the next two years, with an additional collection of almost 1,000 artworks - with another five million euro - will be made available for public exhibitions.