The world's oldest surviving passenger clipper was set to leave Britain for Australia after the Scottish government said their bid to look after the historic ship had beaten an English one.
Owned by the Scottish Maritime Museum, the 145-year-old City of Adelaide is currently resting on a slipway in Irvine on the Scottish west coast.
It faced being broken up but two bids to re-float the ship and preserve it -- one from Sunderland in northeast England, where the ship was built, and another from Adelaide in South Australia -- were considered.
Following Saturday's decision, Scottish Culture Minister Fiona Hyslop said: "We can now have a link between Scotland and Australia which allows both nations to share the vessel's historical, cultural and social significance through tourism, interpretation and education.
"Because of the need for the vessel to be removed from its current location, a viable alternative to deconstruction had to be identified in order to save the ship."
The ship, which predates the famous British clipper the Cutty Sark, transported people and wool between Australia and Britain on more than 20 round trips.
Known for two decades as HMS Carrick after it was commissioned by the British Royal Navy, it has been left to the elements at Irvine.
The Historic Scotland agency said the ship is considered by naval experts to be one of the most significant historic vessels to survive to the present day, for its age, rarity and historic connections.
It said it has a "close cultural association" with South Australia, many of whose present day residents can trace their ancestors' outward voyage from Britain on the vessel.
Rosemary McKay, of the City of Adelaide Preservation Trust, who was visiting the Maritime Museum, said she was "ecstatic" about the decision.
"There is now a lot of hard work ahead and the Australian team will need a lot of support. The main aim has always been to save the ship. Now she will be going home to Port Adelaide, where she belongs," she said.
The trust aims to preserve the vessel on a land-based maritime precinct at Port Adelaide in time for the South Australian capital's 175th anniversary of settlement next year.