A Norman Lindsay painting that has been in police hands for 40 years is on display in Taree from today.

"Woman and Satyr" was seized by police in the 1970s, as the suspected proceeds of crime.

The painting is on loan to the Manning Regional Gallery for 12 months.

The director Sue Mitchell said it is a racy image of a devil and a bare breasted woman.

Ms Mitchell said she has a close connection to the artwork.

"They took all the stolen goods into a police station where they held them in a cell," she said.

"Some of the other goods that it was in with were drugs, and they started to spray them with chlordane.

"One of the policemen grabbed the painting and said, 'It's going to be damaged, this looks like it could be valuable'.

"He took it up to the art gallery and said, 'Here mind this'.

"That policeman happened to be my uncle Peter."

The Manning Art Show 'Naked and Nude' is on exhibition from September 28, until November 10, 2013