This study examined the role of federal varsity libraries in collecting and preserving indigenous knowledge for sustainable development in south east Nigeria. The study adopted a descriptive survey design to study a target population of 166; which contains all the academic librarians in the five federal varsity libraries in the study area. Two research instruments – structured questionnaire and unstructured interview were used for data collection. The data collected was analyzed using mean and standard deviation. The findings of the study revealed that indigenous knowledge is indispensable to sustainable development in the society as its contribution in various aspects of human endeavor is innumerable. Despite this, indigenous knowledge is at the stage of extinction due to libraries inability to collect and preserved it. However, the study found out that insufficient fund, lack of unified collection development policy, unsecured Intellectual Property Right (IPR), moisture, etc are challenges contributing to the low extent of preserving indigenous knowledge in the concerned libraries. Based on the findings the study recommends that library’s collection development policy should give more precedence to collection and preservation of indigenous knowledge. Adequate measures to protect the individual property right of the custodians is also necessary. Besides, for proper preservation of indigenous knowledge libraries should ensure that there is conducive environment.