It collects every production of every building that is currently ready for collection. This includes residential, production, goods, military, GBs, event/special buildings.
If you click on this button and you have production/multi-production buildings that are collected, you will be given the option of what cycle you want to restart them on. This option will not apply to goods buildings, nor will it restart production buildings that were idle when you clicked the button.
It is a one-time collection. You have to pay 5 Diamonds again if you use it again.