Kom Tong Hall has been declared an official monument, ending 16 months of negotiations to prevent the 90-year-old Mid-Levels mansion being demolished for redevelopment.
The hall's owner, the Mormon Church, said it had reached a deal with the government which would save the building.
The church refused to say what it had been offered as compensation.
The church's plans to flatten the red brick mansion, built by tycoon Ho Kom-tong, sparked a public outcry when they were revealed in November 2002.
Heritage experts said the case demonstrated the importance of the public's role in saving Hong Kong's heritage, because of the inadequacy of existing policies and legislation.
Local historian Ko Tim-keung said: 'If nobody had protested against the planned demolition, it would have been torn down already.'