The number 1995 tram is in Bendigo for restoration work by local experts before returning to the Rozelle depot to take pride of place in the revitalised tram sheds.

The tram was one of six historic trams which were badly damaged by graffiti and vandals while in storage at the sheds.

The other five have since been sold.

In 2010 the site was acquired by real estate investment company Mirvac which initiated a conservation management plan for the tram sheds, built between 1904 and 1909.

The plan includes a permanent home for tram number 1995 as part of the company's development of the site.

Mirvac Group Executive Residential, John Carfi, said the fate of number 1995 was assured under the company’s plans for the conservation of the tram sheds.

“We have had a dedicated team working with the City of Sydney, the Sydney Tramway Museum and conservation experts to ensure both the tram sheds and number 1995 are good for at least another century,” he said.

“This has become a labour of love for the people working on the project and it’s great to see her heading off to Bendigo to get the expert attention that one of Sydney’s most historic trams deserves.

"In about six months we expect her back, looking as good as the day she was delivered to the tram sheds.”

The R1 model tram is an example of the last type of tram to be built in Sydney, with two production runs of 55 and 100 trams commissioned either side of World War II.

The tram operated out of the Rozelle depot for six years between 1952 and 1958 before being transferred to the Dowling Street depot.

Sydney's tramway system was in operation for more than a century and at its height was the second largest in the British empire and the largest in the southern hemisphere.

The Rozelle depot was the second largest in Sydney, employing more than 600 staff in its heyday.

But after the NSW government declared four wheeled transport the way of the future the system was wound back with rails and tracks pulled out and most of the fleet burnt.

The number 1995 tram escaped the conflagration and saw service as a hay store and shearing shed in the Southern Highlands before dedicated tram enthusiast Bruce Pinelle tracked it down and bought it for the princely sum of $50.

At the Bendigo Heritage Railway Workshops the rust and graffiti that covers the walls of the number 1995 tram will be removed and the bumps and dents in its bodywork straightened out.

Over the next six months the timber and canvas roof will also be repaired and the original green and cream paintwork will be painstakingly restored to its former glory.

Inside, the timber posts will be sanded and varnished to a honey sheen and the brown vinyl seats replaced.

Meanwhile, in Sydney the tram sheds will be rehabilitated as part of Mirvac's Harold Park development.

In future, public transport enthusiasts wishing to visit the historic site within the residential precinct will be able to access the tram sheds via light rail or bus services.