Terang is the first Victorian town outside of Melbourne to boast it now owns a W-Class tram.
In a delicate operation, the tram was installed in the front yard of the Terang RSL with two cranes.
Terry Fidge, vice-president of the Terang RSL, said it was an exciting day for the town.
Excited school kids lined the fence of the RSL to watch as the tram was moved from a truck to a concrete slab.
"It's been a long process - it's been probably 18 months since it all started," Mr Fidge said.
He said the idea came from World War II veteran Len Pomeroy, who remembers riding trams filled with recruitment posters in 1941.
"It will add to the existing display we have in here," Mr Fidge said.
The RSL hopes to officially open the tram on Remembrance Day this year.
Mr Fidge said the tram would be transformed and one end would resemble a recruiting centre similar to those back in the early `40s.
A multimedia presentation will be installed at the other end and there will be a meeting area in the centre of the tram.
Mr Fidge said Terang was the first Victorian town to receive one of the trams, which the Victorian government announced it was giving away.
In addition to that, he believes the Terang RSL is the only one to have a tram that will form part of its museum.
Mr Fidge said the Terang RSL was a community asset that was built for the community by members of the community.
"We've had a lot of support from Dan Tehan and Richard Riordon, as well as the community," Mr Fidge said.
The state government announced in May last year it was giving away 134 of the iconic trams.
Mr Fidge said Terang RSL president Steve Bloxham had been instrumental in adding to the sub-branch's collection. "Steve has a passion for memorabilia, World War I memorabilia in particular," Mr Fidge said.
"We now have stuff here that is irreplaceable."
Minister for Public Transport Jacinta Allan announced the government was giving away the trams last year.
"If they're not going to be used on the network, we want to keep these trams accessible to the community," Ms Allan said.
"These Victorian icons will now be available to come to life once again and preserved for future generations to enjoy."
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