An ancient, handwritten copy of the Bible's Book of Psalms is to be returned to Ethiopia 135 years after it was looted by British soldiers during the bloody siege of Magdala city.

The 300-year-old book, 7in square and written in the old Ethiopian language of Ge'ez, was part of a huge haul taken by troops in the 1868 invasion of Ethiopia to free Western diplomats imprisoned by Emperor Theodore II.

After the battle, the soldiers loaded 200 mules and 15 elephants with gold crowns, swords, altar slabs and manuscripts, then burned the city to the ground.

Most of the plunder made its way into institutions such as the British Museum and Oxford's Bodleian Library. But a large number of smaller items were taken home by individual soldiers and ended up in private collections. The holy book, which will be returned to the Ethiopian studies department of Addis Ababa University this week, was bought from a private collector for £750 after being spotted in a book dealer's catalogue by members of Afromet, the Association for the Return of the Magdala Ethiopian Treasures.

The return will increase pressure on the British museums and galleries which still hold illuminated manuscripts and other looted items.