The magazine became the subject of the longest obscenity trial in British history in 1971 when it was raided by the obscene publications division of the Metropolitan Police.
Dennis and two colleagues were charged with conspiring to corrupt the morals of the young after the magazine printed an issue created entirely by school children, which included a sexually explicit parody of the Rupert Bear cartoon strip.
Celebrities and readers leapt to the groups defence and launched Friends of Oz campaign group. The Elastic Oz Band was formed and released 'God Save Us' featuring John Lennon and Yoko Ono as part of the protest over the trial. The three editors were eventually acquitted of the conspiracy charge, but jailed for two other minor offences. However, all three eventually won their appeals and were released.
The archive includes posters, flyers and stickers from the protest over the obscenity trial as well as cover artwork, diaries and other documents from the magazine.
The magazine, published between 1967 and 1973, sought to challenge the establishment and encapsulated the spirit of 1960s and 70s counter-culture.
Geoffrey Marsh, director of the department of theatre and performance at the V&A, said: "Oz was one of the leading magazines of the underground press in 1960s and 70s. Fifty years on, it forms an important time-capsule of revolutionary ideas of the period. This material deserves to be preserved at the V&A because the magazine and eventual legal battle over Oz represented a much broader and fundamental shift in British society in the 1960s. It raised the question: should, or even, could ‘The Establishment’ dictate what ordinary people saw, read and thought, or would the public be left alone to make up its own mind?”
The archive, which was purchased with the help of the Art Fund, is currently being catalogued and digitised by the V&A.
Highlights will feature in a forthcoming display tracing a history of British censorship, opening in summer 2018.
Dennis later created publishing group Dennis Publishing which is credited with pioneering computer and hobbyist magazines and later published The Week magazine. He also became a poet in his later life.
When Dennis died in 2014 he left the bulk of his £500m fortune to the upkeep of a forest he created in Warwickshire.