Which AWS service or feature will support this requirement?

Explanations:

AWS Wavelength is designed to bring AWS services closer to mobile and edge devices, optimizing low-latency applications, but it does not address the requirement to retain data on-premises.

AWS Local Zones extend AWS infrastructure closer to end-users in specific geographic areas to reduce latency for applications, but they do not provide a full on-premises data retention solution.

VMware Cloud on AWS allows customers to run VMware workloads on AWS but does not inherently provide a solution for retaining on-premises data as required by legal obligations.

AWS Outposts brings AWS services, infrastructure, and operating models to virtually any on-premises facility, allowing the company to keep certain data on-premises while still leveraging AWS services for other parts of their application.