Development chiefs have rubber stamped approval for almost £33m of funding for a new museum on Liverpool's waterfront.
A Heritage Lottery Fund bid was turned down in January
The Museum of Liverpool will be built on the Mann Island site at Pier Head to replace the Museum of Liverpool Life.
The North West Development Agency's (NWDA) £32.7m grant will cover about half of the funding for the £67m Capital of Culture project.
In January, a bid for £11.4m to finance the interior of the building was turned down by the Heritage Lottery Fund.
The NWDA said the decision on Thursday marked a significant step forward for the scheme.
Steven Broomhead, chief executive of the NWDA, said: "The NWDA is committed to the development of the Mann Island site and believes that the proposed Museum of Liverpool will make a spectacular addition to the Mersey Waterfront as well as significantly boosting the cultural offer in Liverpool.
"This scheme will make an important contribution to the economic development and regeneration of Liverpool, Merseyside and the North West region as a whole."
The futuristic X-shaped building will provide a larger exhibition space to house the urban history collection, currently at the Museum of Liverpool Life.
Exhibits will cover social history and popular culture and will look at Britain and the world through the eyes of Liverpool.