Construction of a new National Holocaust Museum in Amsterdam is expected to begin in February, following the donation of €4m (US$4.5m, £3.4m) from the German government.

Amsterdam's temporary holocaust exhibition within the city's Jewish Cultural Quarter will close its doors next month to allow construction to begin with the new, permanent museum opening on the same site in 2022. In addition, a second building on the other side of the road will be redeveloped so that the museum can offer educational programmes.

The scale of the donation from the German government was a surprise, according to Emile Schrijver, director of the Jewish Cultural Quarter in Amsterdam, who told the Het Parool newspaper: "We thought there might be a donation of €500,000 to €1m. A few weeks ago we received a message from Germany informing us that we would get €4m."

With the donation, he added, the decision is made: "The National Holocaust Museum is coming."

During World War Two, more than 100,000 Dutch Jews – three-quarters of the entire community – were murdered by the Nazis. This is the highest rate anywhere in Europe. The occupying regime ruthlessly enforced Germany's antisemitic laws and even paid the Dutch state railway to deport Dutch Jews to concentration camps.

In a report by The Guardian, German foreign affairs minister Heiko Maas said the museum would help to mark the postwar reconciliation between the Netherlands and Germany

"The National Holocaust Museum in Amsterdam places the right emphasis by encouraging young people to become acquainted with this subject, emphasising the importance of democracy and universal human rights.

"I'm grateful for this contribution to the fight against antisemitism and I am pleased that we can support this important initiative with our contribution to the new Holocaust Museum."

The newspaper also reported that the museum is still €6m (US$6.7m, £5.1m) away from its target of €27m (US$30.1m, £23.1m) for the project, but has a number of applications pending, including with the municipality of Amsterdam, foreign governments, provinces, lotteries and private sponsors.

Amsterdam was the setting for one of the war's most poignant stories – that of Anne Frank, the Jewish schoolgirl whose diary detailing her family's secret life hidden away from the Nazis was published posthumously after the war, bringing worldwide fame.