The bronze work by the Nazi sculptor Wilhelm Wandschneider was brought to Linz in 1942 as a "personal gift" from Hitler, who wanted to make the city the "cultural capital" of the Third Reich.
For 65 years it stood in the rotunda of a park overlooking the city, where the German dictator lived between 10 and 18 years old.
But it was quickly removed in 2008 after a group of art students revealed its unsavoury origins.
Linz's Nordico museum, which had stored the work, will now add it to its collections, Doris Lang-Mayerhofer, who heads the city's culture and tourism committee, said Tuesday.
A detailed explanation will accompany the Aphrodite, she said, adding that the city wanted to make an "active effort at remembrance" rather than "dismantle history".
Lang-Mayerhofer, a conservative ÖVP lawmaker, said the decision garnered unanimous support of parties represented on the city council, as well as the backing of the federal chancellery.
The Greens backed the museum option since it would keep the statue from becoming a beacon for neo-Nazi pilgrimages, while the far-right FPÖ said it would protect the work from "political vandalism".
Despite Linz's relative insignificance for Nazi Germany, Hitler named it one of his "Führer cities" alongside Berlin, Hamburg, Munich and Nuremburg.
Linz had organised in 2008 an exposition delving into this cumbersome heritage.
The Aphrodite sculpture pictured in Linz before its removal in 2008. By Ruchhöft-Plau - Own work, CC BY-SA.3.0