UBS called the allegation "completely unfounded."
The suit filed in U.S. Bankruptcy Court in Manhattan alleges 23 counts of financial fraud and misconduct against the bank and other entities and individuals. It seeks to recover $2 billion for Madoff's victims.
In a statement, trustee Irving Picard accused UBS an administrator of a feeder fund for Madoff's operation of obstructing his efforts to unravel Madoff's massive Ponzi scheme.
The full complaint was filed under seal. Only a redacted version was available to the public.
"We have battled with UBS regarding disclosure of information about the bank's knowledge of Madoff," Picard said. "Unfortunately, they are still trying to shield this information from the public by designating all of their information as confidential."
Madoff's scheme could not succeed "unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did," said David Sheehan, counsel for the trustee.
Without UBS, "Madoff's fraud would have been diminished in both scope and duration," Sheehan added.
UBS denied any wrongdoing on Wednesday.
The charges "are completely unfounded and without merit," the bank said in a statement. "We regret that the trustee filed this unwarranted complaint and will take all appropriate steps to demonstrate that the allegations are false."
UBS said the feeder fund was created at the request of wealthy investors who insisted on investing with Madoff.
The investors had agreed that UBS "was not expected to be responsible for the safekeeping of the assets," the bank said. "UBS does not have responsibility to these shareholders for the unfortunate results of the Madoff scandal."
Madoff, 72, is serving a 150-year sentence in a federal prison in North Carolina after admitting that he ran his scheme for at least two decades, cheating thousands of individuals, charities, celebrities and institutional investors. Losses are estimated at around $20 billion, making it the biggest investment fraud in U.S. history.