The British Museum in London is set to build a £100m extension to enable it to showcase larger worldwide collections.

The decision was made owing to the museum’s inability to accommodate large exhibitions such as Tutankhamun and the Golden Age of the Pharaohs – which will instead go on show at the O2 in Greenwich later this year – as well as the large audiences attracted to its Persia and Michelangelo exhibitions in 2006.

Museum director Neil MacGregor said: “For the Michelangelo we could have had three times as many visitors if we’d had space but the museum is very limiting for sculpture and for large crowds.”

The proposed 1,000 sq m (10,760sq ft) venue will replace the former offices of the British Library on Montague Place, located to the rear of the museum building.

Planning permission is being sought from the London Borough of Campden and, if successful, the centre is anticipated to open in 2011.

A conservation centre is also being considered in order to train museum conservators. It may, in part, be open to the public so that the museum’s conservation work can be more fully appreciated.

In the meantime, the museum’s Reading Room has been converted to host an anticipated record audience for The First Emperor: China’s Terracotta Army exhibit this September.

Architects Rogers Stirk Harbour and Partners – designer of the famous Parisian Pompidou Centre – has been appointed to develop the project.