The new Museum of Liverpool is to receive £5m in European aid.
The new museum is expected to be ready for 2008
Work on the museum to replace the Museum of Liverpool life, is expected to be completed in 2008.
The Merseyside Objective One award for the £31m Pier Head construction project follows £26.8m from the Northwest Regional Development Agency (NWRDA).
The European grant was welcomed by Culture Minister David Lammy who said it would help provide a "fitting showcase" for the city.
The new X-shaped building at the Mann Island site will provide more exhibition space.
Planned exhibits will include a 19th Century locomotive that ran on England's first passenger railway line between Liverpool and Manchester.