The National Gallery of Australia is preparing to return a bronze statue that was allegedly looted from a temple in India.

A statement from the Attorney-General’s Department says the National Gallery has voluntarily removed the Dancing Shiva from display.

Indian police believe the 900-year-old statue was stolen as part of a multi-million-dollar heist by New York art dealer Subhash Kapoor.

The statue has been on display at the Canberra gallery since 2008, when it was sold to the gallery by Kapoor for $5.6 million.

Kapoor is currently on trial in Chennai for allegedly ordering the theft of 28 artefacts from two Indian temples.

Kapoor’s manager has already admitted to New York’s supreme court that the Shiva was stolen.

The gallery has maintained it ran appropriate provenance checks before buying the statue and had said it would continue to display the piece while investigations continued.

However, the Indian government has formally requested the statue’s return and it will now be returned to India in line with Australia’s international obligations.