The Australian War Memorial will not remove portraits of Ben Roberts-Smith.
The Victoria Cross holder's combat uniform will also remain at the national shrine of remembrance.
A Federal Court judge found the Australian special forces soldier committed a slew of war crimes while in Afghanistan including the murder of unarmed prisoners. He lost the case he brought against newspapers over the revelations.
The war memorial has several items from Mr Roberts-Smith on display and will keep the exhibits but put additional explanations alongside them.
The chairman of the memorial's council, Kim Beazley, said: "Collection items relating to Ben Roberts-Smith VC MG, including his uniform, equipment, medals and associated art works, are on display in the memorial's galleries. We are considering carefully the additional content and context to be included in these displays.
"The memorial acknowledges the gravity of the decision in the Ben Roberts-Smith VC MG defamation case and its broader impact on all involved in the Australian community.
"This is the outcome of a civil legal case, and one step in a longer process."
The council met on Friday morning, the day after the ruling in which Justice Anthony Besanko found that, on the balance of probabilities, the special forces soldier had kicked a handcuffed prisoner off a cliff in Afghanistan in 2012 before ordering a subordinate to kill him.
There is a view on the AWM council that the museum side of the institution should reflect all sides of war, the heroic and the evil. It is not known where former prime minister and council member Tony Abbott stands on the current debate.
At the war memorial on Friday, there was some support for the soldier.
Vietnam war veteran John Pettigrove was so angry at the way the Victoria Cross holder had been treated that he was barely able to speak. Conquering his rage, he said: "Just leave him alone. He should be given another VC."
And Mr Pettigrove said the exhibition of Mr Roberts-Smith's uniform and portraits should remain.
His wife (to whom he proposed by mail when he was on his way to Vietnam on HMAS Sydney) said: "We do feel that he [Mr Roberts-Smith] has been persecuted. They are just trying to senstationalise everything."
Another visitor, Simon Pintus, said about the disgraced soldier: "He's a good bloke. He's a VC holder."
A fourth visitor, Lex Sommerville, said: "He should be left alone."
He, Mr Pintus and Mr and Mrs Pettigrove were at the extreme, pro end of the for-and-against spectrum of what was a highly unscientific sample.
But there was also a view that the items should stay but with additional explanatory text.
On this view, the bravery that earned him the Victoria Cross should not be erased but the disgrace over the war crimes that emerged in court should be documented and explained prominently.
Jim Donaldson was spurred to by the court decision to make his first visit to the war memorial in seven years. He went to see the disgraced soldier's uniform and portraits.
"I surprised that they were still there," he said after viewing the disgraced soldier's section.
"I'd be tempted to leave it but have a couple of commentaries added related to what happened."
And he thought the man should keep his medal for extreme gallantry. "Assuming the reasons he got the VC are true, that should still be recognised."
Away from the war memorial, others were certain that Mr Roberts-Smith should be expunged from the exhibitions.
Australian Greens defence and veterans' affairs spokesperson David Shoebridge said: "Is it appropriate to put that display back given what we've heard from Afghan families, what we've heard from Afghan witnesses and what we've heard from other members of the NSA?
"I think it's a matter which involves some long and deep reflection, but today there will be thousands and thousands of visitors going to the war memorial and seeing the uniform with a glowing and celebratory description next to it."
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