Craft ladies toiled for two and a half years to create the curtain that will never again darken the doors of the mountain village's community hall, where the infamous artwork hangs across the stage.

A long-running court battle waged by senior counsel on behalf of the craft group on one side, and the Snowy River Council and hall committee on the other, culminated in a Cooma magistrate ordering the return of the seven-metre-long stage curtain.

Mayor John Cahill will lead celebrations marking the curtain's return on Tuesday. A towering gum tree, leaping rainbow trout with glittering scales, Lake Eucumbene, mountains, Murrumbidgee River, snow skiing, settler's hut and fly fishing have been stitched into the curtain.

Hall committee chairman Pam Brayshaw said many residents had fallen out with one another over the disputed ownership.

"I don't think the people will ever get over it," she said. "The curtain, it is beautiful. It is in its original place and it belongs to the people of Adaminaby."

Unveiled in 2004 in the Adaminaby Memorial School of Arts Hall, the curtain became a tourist attraction but like the building it hangs in, has become a symbol of division. Adaminaby's first split happened in 1957 during the construction of the Snowy Mountains Hydro Electricity Scheme.

Old Adaminaby was relocated to make way for Lake Eucumbene. Many people who had wanted the town relocated a short distance, to the dam's high-water mark, left the district when Adaminaby was relocated further away near the main road to the mountains.

The hall, including its mountain ash timber dance floor, was rebuilt in the new town, with two Snowy workers' huts tacked on one side for the kitchen, which has a monstrous cast-iron stove donated by a pub.

In 2010 the curtain was taken down for repairs and the following year the council asked for it back.

In court, a driving force for the craft group, Ann Kennedy, who had been appointed to manage the hall, said she had bought the fabric for the curtain for $178 and the design was hers. But magistrate Chris Bone found the shire had paid artist James Melverley $1950 for a concept and design.

"It was his design, the product of his imagination which was followed, (in my opinion, meticulously) by the skilled exponents of the techniques of sewing and applique," Mr Bone said. "There is only one Adaminaby and there is only one curtain which depicts its history and its seasons," the magistrate said. "The curtain is unique and, for the people of Adaminaby, it is priceless."

Mrs Brayshaw said Ms Kennedy once helped her organise old-time dances to raise funds for the hall, but no longer did so.

"It's such a shame," she said. "No, she doesn't talk any more [to me], she doesn't talk to anybody in town. We went to school together, I give her 10 out of 10. She turned up every week to oversee the people sewing the curtain, she was the hall manager, she kept the place clean, hired everything out, did everything she had to do."

Mrs Brayshaw said new arrivals to the town in recent years had caused the unrest.

"I had a lot of records, I'm a bit of a bower bird, I go back to 1996 with different things. I had a lot of paperwork to do with the curtain, council had it as well but councils change over the years, the councillors change, they would not have known what they were looking for. I was lucky enough to have copies and they were able to find originals which all helped with the court case."