The 51-centimetre stele depicts its owner hunting and is from Egypt's Old Kingdom period (c. 2649-2134 BC), Egypt's Supreme Council of Antiquities said in a statement.
Steles are upright stone slabs or column typically bearing a commemorative inscription or relief design, often serving as a gravestone.
The Museum of Basel is returing the artefact to Egypt amid a repatriation campaign spearheaded by Egypt's antiquities minister Zahi Hawass.
One of Egypt's most renowned archaeologists, Hawass became a minister earlier this this year. As long ago as in 2002 when headed the Supreme Council of Antiquities, he threatened to cut scientific and research ties with any museums, universities or other institutions that held stolen Egyptian antiquities.
The Museum of Basel volunteered to give back the 5th Dynasty hunting stele and has already sent back the eye of a colossal quartzite statue of the ancient Egyptian pharaoh Amenhotep III (c. 1390-1352 BC) found in 1970 at his funerary temple in Kom el-Hettan at Luxor, on the west bank of the Nile.
The eye was smuggled out of the country, then loaned to the museum by a private collector where it was recognised by Egyptologist Hourig Sourouzian, and returned to the Egyptian Museum, Cairo, in October 2008.