Three hundred pieces of valuable memorabilia will now stay in the city after the Rotorua Energy Charitable Trust (RECT) purchased the collection, donating it to the Rotorua Museum for safe keeping and display.
The Rotorua RSA closed its doors last year after 99 years of operation, with fears some of its large collection could end up outside Rotorua or even New Zealand.
RECT chairman Grahame Hall said the purchase not only helped the RSA settle its finances, but had also been made for the current and future benefit of the Rotorua community.
"The items in the collection are hugely significant to our community and this purchase means that items that have relevance to Rotorua do not leave our city.
"It was fitting for the items to be donated to the Rotorua Museum, who will become safe holders of these precious items and will also undertake the necessary work to preserve and display them for the future.
"As each year passes, our support of those who battled on our behalf is actually becoming even stronger, and the purchase of this collection ensures these people and their efforts will not be forgotten, and can be absorbed and discussed by future generations."
Rotorua Mayor Steve Chadwick said she was thrilled the RSA's valuable collection would remain in the community's hands, with the Rotorua Museum being the logical place for it to be held.
"This collection of memorabilia is so important to our city and our people and it is fantastic that people will be able to view it for generations to come. We must never forget."
Rotorua Museum director Stewart Brown said the closure of the RSA was a significant loss not only for RSA members, but also for the entire Rotorua community.
"The Rotorua RSA is one of the oldest in New Zealand and its collection was extensive to say the least.
"The Rotorua Museum, RECT and RSA spent a considerable amount of time in August 2015 selecting items based on their relevance to Rotorua. The result is a 300-piece collection that is deeply connected to our community.
"From photos and artwork to uniforms, medals, trophies and plaques, each piece of the resulting collection has a story linked to the people of our city.
"One of the most valuable items in the collection is an extremely rare badge from the Long Range Desert Group. Initially formed by New Zealand soldiers, the group were intelligence experts in desert navigation, serving behind Italian lines in Egypt from 1940 to 1943.
"The badge's connection to Rotorua comes from its thought-to-be designer Bluey Grimsey from Ngongotaha. The circle represents a wheel while the scorpion is used for its fatal sting in the dessert - which is what the group was there to do."
Mr Brown said the items would be displayed in future exhibitions, although additional research on each item would be completed first.
"Before the items can be displayed, there is a lot of necessary research work so that we can put the collection into context," Mr Brown said.
RSA president William Mcdonald said the RSA was extremely proud of its collection and collection curator, Alan Bines, who dedicated 26 years to its evolution.
"RECT's support has been incredible and we're overjoyed that a significant portion of our collection has been retained in Rotorua.
"Under our agreement with the Rotorua Museum, the RSA can borrow items for special occasions, so it's wonderful to still have access."