The historic Punch magazine archive, including letters by Anthony Trollope and Charles Dickens, has been purchased by the British Library.
Mr Al Fayed bought Punch in 1996
The archive boasts more than 1,000 original cartoons, as well letters from illustrious literary figures such as A.A Milne and PG Wodehouse.
Harrods owner Mohamed Al Fayed agreed to sell the £500,000 archive, calling the magazine "a British institution".
The satirical magazine folded in 2002 after 160 years in print.
"Punch magazine is a national treasure, a British institution," said Mr Al Fayed.
"It is vital that it should be preserved for the nation so that future generations may have the benefit of this historic collection of the best of British humorous writing and art which chronicled British society over many generations."
Punch was launched in the summer of 1841, at a time that saw an upsurge in radical politics, and took a stance as the "defender of the oppressed and scourge of all authority".
In later years, the magazine became increasingly conservative in outlook - but never lost its satirical sense of humour.
The library hopes the archive will go on display this autumn
Among the items in the archive is the famous Punch table inscribed with the initials of past contributors. Most recently, it has been employed in Harrods' boardroom.
According to the Times, other historic documents include 48 letters from poet, Lord Alfred Tennyson, as well as correspondence from Sir John Betjeman and playwright Tom Stoppard.
"This is the first time much of this material will be freely available to the public. Previously only academics have been able to study the letters," said Christopher Wright, head of the manuscripts at the British Library.
The library hopes the archive will be ready for public display in the autumn.