Plans are now underway for a joint exhibition, "From the Garden City to the Green City", to be held in autumn 2011 at the London museum, which launched a Dutch garden design show last week.
The archive had been under threat after cost-cutting at the Landscape Institute and the redundancy of archivist Annabel Downs last year. It is not yet accessible to the public, said museum director Christopher Woodward. He added: "The next stage is to become a 'hub' for archives and public programmes of a partnership of the Landscape Institute, the Garden History Society, the Association of Garden Trusts and the Parks and Gardens Database UK.
"This is the most important collection of its kind in the UK and will be the foundation of a major archive of design. It's remarkable that Britain has never had a home for its great designers' papers. For the first time it looks likely to happen."
Land Use Consultants principal Dominic Cole campaigned to save the archive, arguing that "it is the soul of the institute". He said he was happy that the archive had been saved and that the issue was now resolved.
Landscape Institute chief executive Alastair McCapra said: "Nothing in the relationship with the Garden Museum compromises the institute's ownership of the collections. As well as retaining ownership, the institute will also retain custody, with the exception of any items requested for loan or scholarly use by the Garden Museum.
"Plans, drawings, slides and other archive materials will be held in specialist archival storage and will be requested by the museum for hub activities or by individual scholars and researchers."