An ensign flag, donated by Clutha Valley servicemen in 1939, honouring fallen local soldiers from World War 1, was given to the school at its official opening in June 1939 but later vanished.
However, when cleaning up the old school before it was demolished more than 18 months ago, principal Val Ward found the flag in a cupboard. Thinking nothing of it, she threw it in a skip of rubbish before finding a plaque commemorating the gift.
In a mad rush, she retrieved the flag and gave it to the South Otago museum for safe keeping.
Earlier this year, an excited Clydevale Women's Institute president Alexa Craig discovered the flag at the museum.
"As soon as I saw it, I was thrilled. It was going to be so good to take it back to the valley," she said yesterday before a brief handing over ceremony.
The 2m by 90cm flag, which resembles the New Zealand flag in every way except that it carries the emblem of the Clutha Valley RSA at the bottom, was handed to the school during the official opening and placed on the flagpole, which still stands today.
First-day pupil George Dunlop struggled to remember the actual handing over back in 1939, but he was there yesterday.
"It's good to see it back," he said.
The institute, which caters for the Clutha Valley Lions Club, approached that group to see if it would help pay the $675 to frame the flag behind glass.
The institute provided $200 and the Lions paid the balance.
Lions president Terry Carr said it was a great community project and he was pleased to see a touch of heritage featuring in the new school which only opened early this year.
