It has also renewed calls for the return of Kelly's missing skull, stolen in 1978 from a display case at the Old Melbourne Jail, where it had rested next to his death mask.
The skull was reported to have been hidden on an Outback station in the north of Western Australia, and in 2009 a skull marked with the inscription "E. Kelly" was turned over to Victorian authorities. DNA testing established it was not Kelly's skull.
"We appeal to the person who has the skull in their possession to return it to the Victorian Institute of Forensic Medicine so that when the time comes for Ned to be laid to rest, his remains can be complete," Ellen Hollow, the great-granddaughter of Kelly's sister Kate, told the ABC.
Yesterday the ABC reported that the return of the remains to Kelly's family had been confirmed by a new exhumation licence issued by the Victorian Government.
While Kelly's remains may finally find peace, controversy will continue over a man hailed by one side of the debate as a champion of the oppressed, and by the other as a thief and cold-hearted killer.
He remains an Australian folk hero, the subject of more books, songs and websites than any other figure in the nation's history, and featured in numerous movies that began in 1906 with The Story of the Kelly Gang - the world's first full-length feature film.
Born to an Irish convict family in 1855 at Beveridge, north of Melbourne, Kelly first ran foul of the law at 14 after attacking a Chinese man, and finally fled to the bush with his brother Dan and friends Joe Byrne and Steve Hart.
His end came in 1880 when, after two years on the run and the killing of three policemen, the Kelly gang donned homemade armour for a showdown with police in Glenrowan, north of Melbourne.
In November 1880 Kelly was hanged for murder and buried at the Old Melbourne Jail.
Hollow said that Kelly had always wanted to be buried close to his family.
"Both the Kelly and King families are glad to have matters resolved and to be granted the variation to the exhumation licence to have Ned's final wish granted," she said.
Kelly's mother, Ellen, married George King after the death of her first husband Red, Kelly's father. Hollow said the Kelly family would arrange a private burial. A memorial would be considered.