Thame is to have its own museum and organisers hope part of it will be dedicated to Lord of the Rings author JRR Tolkien.
The Tolkien Society has been looking for a permanent home and had wanted to set one up in Thame.
Several years ago it asked the town council for help, but the council had no premises to offer.
Thame museum committee chairman Dave Bretherton hopes the new museum will fit the society's needs.
The author set one of his lesser known books, Farmer Giles of Ham, in and around Thame and Worminghall.
The new museum will be in the former magistrates' court, in Lower Higher Street, which the town council is buying for an undisclosed sum from Oxfordshire County Council.
Mr Bretherton, a member of both Thame town and South Oxfordshire district councils said: "We're absolutely delighted. The old courthouse will be an ideal place for a museum.
"We already have lots of things to start off a significant display in the museum, when it opens early in 2005."
The Tolkien Society welcomed the move. Society member Ian Collier said: "This is a very interesting suggestion and one which the board of trustees is looking at. No decision has been made, but we will be in touch with the town council to get to know more about what is proposed."
A recent survey showed 82 per cent of Thame residents wanted a new museum.
Residents will be able to view what is planned for the museum at a temporary exhibition in the town hall on February 6 and 7.
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