The painting hanging on the wall was painted by Picasso.
Literal
Wall [on-に] hanging painting [topic-は] Picasso [by-によって] painted was.
Two layers of modification: 壁に掛かっている is a relative clause modifying 絵, then ピカソによって描かれた uses the passive with によって to mark the agent. によって is more formal/written than に for agent-marking in passives — common when naming famous creators.