Several people had pledged their penises over the years -- including an American, a Briton, and a German -- but Arason's was the first to be successfully donated, Hjartarson said.
"I have just been waiting for this guy for 15 years," he told The Associated Press in a brief telephone interview.
Hjartarson's museum started in Reykjavik but has since moved to Husavik, a small community better known for its whale watching. The Phallological Museum is an important part of the region's tourist industry, bringing in thousands of visitors every summer.
Highlights of the museum's collection include a 170-centimeter (67-inch) sperm whale penis preserved in formaldehyde, lampshades made from bull testicles and what the museum described as an "unusually big" penis bone from a Canadian walrus.
Hjartarson, 69, said his interest in what he calls "phallology" began when, as a youngster in rural Iceland, he was given a whip made from a bull's penis to help him herd cattle. Later, when he worked at a school near a whaling station, colleagues brought him whale penises as gifts.
"That was how it started. I opened this museum 15 years ago with 62 specimens," he said. Now, with the addition of Arason's organ, he has 276, many suspended in formaldehyde or dried and mounted on the walls.
Photos posted to the museum's website show small army of ghostly, whitish penises stuffed into jars, tall glass cylinders and large aquariums. There are sculptures, molds and other penis-related craft items. Outside, the museum has a large tree trunk carved into the shape of an erect phallus.
Most items are donations from friends and well-wishers, people listed on the museum's website as "honorary members."
Arason was described by Hjartarson as a former tourism worker who died Jan. 5 in the nearby town of Akureyri. Thorvaldur Ingvarsson, the medical director of Akureyri's hospital, didn't give a cause of death but said the specimen was removed from the body under the supervision of a doctor.
The phallus was officially installed in a ceremony last week, Hjartarson said, adding that he saw nothing wrong with the idea of having someone donate their penis to be shown off to the public.
"People are always donating some organ after they died," he said. "It's no more remarkable to donate a penis than it is to donate an organ like a kidney."
Hjartarson said the donation fit with Arason's personality.
"He liked to be in the limelight, you know? He was a funny guy," he said. "He was a boaster, a braggart ... he liked to be provocative."
But the museum director was coy when asked about the size of his newest acquisition.
"I can't tell you that," Hjartarson said. "You will just have to come and see it."