Kelly’s skeleton was identified in September, 2011 after a 20-month investigation of 24 sets of bones exhumed from the former Pentridge Prison site, owned by developer Leigh Chiavaroli.

Chiavaroli planned to keep the bones to use as part of a museum, but yesterday the Victorian state government issued a new exhumation licence, which returns the skeleton to the Kelly clan.

Ellen Hollow, Ned’s great grand-niece, also pleaded for the return of Kelly’s missing skull, which was not buried with his body.

“Both the Kelly and King families are glad to have matters resolved and to be granted the variation to the exhumation licence to have Ned’s final wish (for a family burial) granted,” Ms Hollow said.

“We also appeal to the person who has the skull in their possession to return it to the VIFM, so that when the time comes for Ned to be laid to rest his remains can be complete.”

The family last year turned their backs on a public memorial to avoid controversy and preserve the dignity of his burial, vowing to lay him to rest in private.

Despite the granting of the licence, Chiavaroli has laid claim to the bones, saying he had an agreement Kelly would be reinterred at Pentridge for a memorial or museum in his development.

Chiavaroli has also requested the state government give him $3m compensation for building delays during the exhumation.