Durham University is rejoicing following news that a stolen rare Shakespeare book is returning home. The 17th Century Shakespeare First Folio, a national treasure owned by the University and stolen ten years ago, will be returning following its discovery in Washington, USA.

Durham Police (UK) arrested a man in Washington, Tyne and Wear, two-weeks after the First Folio, regarded by many academics as the most important book in the English language, turned up at the Folger Shakespeare Library in Washington DC, where it remains in safe care.

The First Folio is essentially priceless, but has been given an estimated value, when in perfect condition, of £15m. It was published in 1623 and is the first collected edition of Shakespeare's plays. Only between 200 and 300 copies are thought to have survived around the world.

It was one of seven books stolen in December 1998 from the University's Library on Palace Green which stands between the Castle and Cathedral. The theft appears to have been undertaken by professionals with long-term international connections in the art world.

Bill Bryson, Chancellor of Durham University and author of an acclaimed book on Shakespeare, said: "This is not only wonderful news for Durham University but for all Shakespeare's scholars and fans around the world, of which I am most definitely one.

Like Shakespeare himself, this book is a national treasure giving a rare and beautiful snapshot of Britain's incredible literary heritage. I'll certainly be joining the crowds who will be eagerly welcoming it home."

The Shakespeare First Folio was acquired by John Cosin, former Bishop of Durham, and was part of the library he established in Durham in 1669.

At the time it was stolen experts described it as "the most important printed book in the English language".

Vice-Chancellor of Durham University, Professor Chris Higgins, said: "Staff and the community felt a huge sense of loss when the books were stolen, so you can imagine my excitement and delight when I received the call from the police to say the First Folio had been found.

Durham University is custodian of many priceless historic treasures, dating back to the medieval period. We are currently planning to make these available to staff, students and the public to enjoy on Palace Green, of course under a strict security regime. It will be wonderful to be able to include the Shakespeare First Folio in such displays again.

Our security has been very significantly reviewed and enhanced to the highest standards since the theft ten years ago and we are confident the First Folio will be safe when it arrives back in Durham."

We also very much hope that the other books stolen at the same time will be found soon so they can return to Durham too."

The haul made up part of an exhibition being held in the library charting the progress of English literature from the Middle Ages to the 20th Century.

Also included in the haul was a 15th century manuscript, including a fragment of a poem written by Geoffrey Chaucer, the author of The Canterbury Tales, two works by the 10th century poet Aelfric, printed in 1566 and 1709, an edition of Beowulf printed in 1815 and a 1612 book of maps and poetry.

Durham University plays host to a number of historic treasures, including the Routh and Bamburgh libraries, the Book of Hours, the internationally acclaimed Sudan archive, and other important archive collections, including the Earl Grey papers and the Durham Diocesan Archive.