Pierre Le Guennec, convicted last year along with his wife of possessing stolen goods, said that after Picasso died in April 1973, his widow had asked him to store between 15 and 17 garbage bags containing the artworks.
"Mrs Jacqueline Picasso had problems with Claude Picasso," the 77-year-old defendant told the court in the southern city of Aix-en-Provence.
Le Guennec said that some time later Jacqueline Picasso retrieved the bags but gave him one of them.
Other more intimate works include portraits of Picasso's mistress Fernande, drawings of his first wife Olga and a drawing of a horse for his children.
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The unsigned works, which had not been inventoried, were created between 1900 and 1932.
The authorities seized the works after Le Guennec tried to get them authenticated in 2010 and handed them over to Picasso's son Claude Ruiz-Picasso, who represents the artist's six heirs.
Their lawyer Eric Dupont Moretti said he had learned this version of events only a few days ago.
Le Guennec said he did not reveal the truth before for "fear of being accused along with madame of having stolen these bags".
The couple were initially given two-year suspended prison terms for possessing stolen goods by a court in March 2015.
Their appeal is set to last one day, with the defendants facing maximum jail time of five years and a fine of 375,000 euros (USD 410,000) - or half the value of the pieces, whichever figure is greater - if the conviction is upheld.
Le Guennec, who worked for Picasso between 1970 and 1973, said Jacqueline gave him the 271 works as a gift recognising the couple's devotion.
He described the 180 single pieces and a notebook containing 91 drawings as "drawings, sketches, (and) crumpled paper".
Uninterested in the haul, Le Guennec said he put the collection in his garage and discovered it again in 2009.