The 13 works include a painting valued at $240,000, from Hotere's Aramoana series.
Considered one of the most significant private collections of his work in New Zealand, it was installed in the hotel by former owners Barry Colman and Cushla Martini during a $1 million refurbishment of the building.
Mr Colman and Ms Martini bought the hotel in 2001 and restored the 1874 bluestone building, before Ms Martini died in September 2005, aged 55, a month after being diagnosed with a virulent blood-borne cancer.
The hotel restaurant was later named Cushla's in her honour.
Mr Colman, who publishes National Business Review, sold the hotel in April last year to Dunedin builder John Kidston, his wife Mary and daughter Jo.
He contacted the hotel last week to ask for the works back and will collect them during a visit to Dunedin this weekend.
"We weren't able to buy the Hoteres when we bought the hotel last April and Barry has been generous enough to leave them here on loan," Jo Kidston said yesterday. "A lot of the locals are actually a bit blase about them, because quite a few people around here have already got them [Hoteres].
"Ralph used to give them away to friends for birthdays and presents. He was a keen golfer and he even used to give them to the Port Chalmers Golf Club for prizes. Some of the golfers joked that they would have preferred a six-pack of beer."
Ms Kidston said the space would be used to exhibit work by local artists and display historic photographs of the Careys Bay and Port Chalmers area.
"We're sad to see them go, but it's an opportunity to do something different," she said.
Mr Colman was unable to be contacted yesterday.
