Katikati's heritage is set to be preserved after the Western Bay of Plenty District Council agreed to guarantee a loan to save the Katikati museum.

The council guarantee will lower the interest rate charged on the $550,000 loan Katikati Heritage Museum Society needs to buy the privately-owned museum.

The museum building and land which a $550,000 loan is needed to buy.

The lower interest cost makes the society's plans viable by saving $17,000 in annual repayments.

Museum society chairman Alistair Boot welcomes the council's decision made on Thursday, but says there are still 'a lot of hurdles” and work to do before the museum and its collection is in community ownership.

'It's fantastic to know our heritage is going to be in our hands,” he says.

The council is not putting any money into the museum – and Alistair says the loan guarantee is secure because the museum will be able to stand on its own feet as a viable operation.

The museum's owners have been trying to sell it for two years – and plans to save the local heritage came to a head in March when the owners announced plans to sell off artifacts.

Alistair says 'a few more obstacles” need to be overcome – including establishing a community trust, organising a bank loan and completing the sale process – and predicts ownership will not change until at least December or January.

He says it was great to get all the museum artifacts in the deal, as they would have cost lot more on the open market.

The group will apply for community grants to clear the loan.