The family of Muppet Show creator Jim Henson has agreed to donate his collection of puppets and sketches to Atlanta's Center for Puppetry Arts.
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The museum will display up to 700 pieces in the new Henson wing, which is scheduled to open in 2012.
The exhibit will include characters from cult films The Dark Crystal and Labyrinth, and TV show Fraggle Rock.
Museum founder Vince Anthony said fans would be able to "immerse themselves in the life and career of Jim Henson".
A Kermit the Frog puppet is already on display at the museum. Other exhibits from the larger collection will be shown at the museum on a rotating basis until the new space opens.
The exhibition will also include character animation technology and experimental films such as the Oscar-nominated Time Piece.
Henson, who died in 1990, officially opened the museum 29 years ago with Kermit the Frog. The pair attended its 10-year anniversary in 1988.
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Henson's daughter, Cheryl, president of the Jim Henson Foundation, said she was "delighted" - adding that there was "no better place to celebrate" her father's work.
"Many exhibits can only present a small portion of what Jim created and accomplished in his life time," said Mr Anthony.
"What makes the Center unique is that we can become a living, breathing, evolving representation of Jim Henson's legacy," he added.
Last year it was revealed that the Jim Henson Company is working on a film based on the 1980s children's television series Fraggle Rock.