An Australian farmer has handed over a skull which he says belongs to the legendary Irish bushranger Ned Kelly (no relation!)

The farmer, Tom Baxter, says the skull is the one stolen in 1978 from a display case at the Old Melbourne Gaol where Kelly was hanged in 1880.

However, Baxter is refusing to say how it came into his hands.

An official inquiry has now been opened some 129 years after the bushranger was hanged.

Australian Attorney-General Rob Hulls said the state of Victoria now had access to more methods to see if the skull was genuinely that of Ned Kelly.

"We now have a unique opportunity, using a combination of historical research and modern technology, to test whether the remains ... are actually those of Ned Kelly," he said.

A descendant of the Kelly family has also offered their DNA for testing.