The Cardiff museum will be in the old library building in The Hayes
The millionaire head of insurance company Admiral is donating "a substantial sum" of his money to a museum celebrating Cardiff.
Henry Engelhardt said he and his wife Diane were great believers in the need for a museum for the Welsh capital.
The Cardiff Story will open in the old library building in The Hayes this autumn with the first galleries looking at how the city was shaped by industry.
The last dedicated city museum closed 85 years ago.
Since then, exhibits have been stored across the city centre at the National Museum Cardiff in Cathays Park.
The museum, which has also received funding from Cardiff council and the Heritage Lottery Fund, will be based around a core collection of around 8,000 artefacts, along with temporary exhibitions.
It aims to tell the story of Cardiff through the eyes of its people.
Mr Engelhardt, an American, is himself an economic migrant and has played a role in the development and history of Cardiff, with Admiral being one of the first financial service companies to set up in the city back in 1993.
It is also Wales' only FTSE 100 company, employing about 1,500 in Cardiff and Newport, along with 1,100 in Swansea.
Mr Engelhardt said: "My wife and I are great believers in the need for a museum of Cardiff to celebrate its residents who have been drawn to the city from all backgrounds and cultures.
"I am able to offer my personal pledge to ensure the vision for the museum becomes a reality."
He said a condition of his offer was that it be used to kick-start the funding drive of the museum's newly-formed charitable development, which will seek donations from private benefactors and the city's business community.
'Give something back'
Museum manager Kate Howe said Mr Engelhardt had offered practical support, as well as money.
"As we begin to move out of recession Henry is leading the way for business and private benefactors to demonstrate that they want to give something back to the communities their businesses have developed in, and this kind of cultural philanthropy is the way forward," she said.
"Like the original Victorian entrepreneurs who founded a Cardiff museum and free library in the old library building in the 1880s, Henry's donation to the museum means that his role in the city will be cemented in time."