A shield collected after a skirmish at Botany Bay in 1770 is set to go on display at the British Museum as part of an "immensely important" exhibition devoted to the history of Indigenous Australia.

The exhibition will draw on objects from the British Museum's collection and loans from Australian and British collections.

The bark shield is believed to have been collected by Captain James Cook or one of his men, and has a small hole believed to have been made by a spear.

Gaye Sculthorpe, the British Museum's curator for Oceania and Australia, has previously described the shield as a "truly remarkable, significant, important object".

"There was a skirmish on the beach and this shield was dropped and it was collected and brought back to England," she said in 2013, when planning for the display was underway.

Objects from the early days in Sydney are particularly significant because very few are left after fire destroyed the Australian Museum's collection in 1882.

Yumari by Uta Uta Tjangala (c. 1926–1990) of the Pintupi people. ( Supplied: British Museum )

The exhibition also includes the masterpiece Yumari, a design which now features on the watermark of current Australian passports, along with a protest placard from the Aboriginal Tent Embassy established in 1972, contemporary paintings and specially-commissioned artworks from leading Indigenous artists.

The exhibition is expected to bring these artefacts to a wide audience - the British Museum welcomes over 6 million visitors a year, similar to the total number of overseas visitors to Australia.

"The objects displayed in this exhibition are immensely important," the museum said in a statement.

"The British Museum's collection contains some of the earliest objects collected from Aboriginal people and Torres Strait Islanders through early naval voyages, colonists, and missionaries dating as far back as 1770.

"Many were collected at a time before museums were established in Australia and they represent tangible evidence of some of the earliest moments of contact between Aboriginal people, Torres Strait Islanders and the British."

Many of the objects are expected to travel to Canberra later in 2015 for a related exhibition at the National Museum of Australia.

It will be the first time that these objects have been exhibited in Australia since they were collected.

The British Museum acknowledges that for Aboriginal and Torres Strait Islander peoples, this return will be of high cultural and symbolic significance.

Indigenous Australia: Enduring Civilisation opens in London on April 23.