A new museum celebrating French art, aesthetics and urbanity is set to be built in the 16th arrondissement of Paris, with a design by Pritzker-winning architect Frank Gehry.

The building, described as “a major new cultural institution with international influence”, will be part-funded by the luxury goods billionaire Bernard Arnault, CEO of LVMH, who launched the project at a press conference on Wednesday (8 March) alongside Paris mayor Anne Hidalgo and president François Hollande.

Named La Maison LVMH/Arts, Talents, Patrimonie, the building will be located close to Gehry’s Fondation Louis Vuitton, which was also funded by Arnault – whose company owns the Louis Vuitton brand.

Rather than creating a new building from scratch, the architect will carefully renovate the former National Museum of Folk Arts and Traditions. The building, designed by Le Corbusier protégé Jean Dubuisson, opened in 1975 but closed in 2005.

The French Ministry of Culture has long stated its intention to return the use of the building to the City of Paris, which owns the property, to serve a cultural purpose. However, this has been delayed due to the complexity and high costs of renovation.

Arnault has reportedly pledged €166m for the project, and suggested the museum’s purpose. It will be dedicated to artistic creation, live performances, “French savoir-faire,” and “the exceptional artisanal craftsmanship that have long helped define the heritage of Paris and France.”

Gehry has worked on the design in close collaboration with the heirs of Jean Dubuisson. While few concrete design details have been presented, it has been confirmed the museum will include two exhibition, concert and performance spaces, as well as artist workshops, a documentation centre and a restaurant with panoramic views.

The project will be presented to the Paris municipal council on 27 March. Arnault is seeking an agreement whereby LVMH can operate the public building at a reduced rate for the first 50 years after it opens. In return, it will pay an annual fixed fee of €150,000 to the City of Paris, as well as a variable fee of between 2 per cent and 10 per cent of revenues, depending on the activities and their volume. When the concession reaches its term, the building will revert to the City of Paris.

If approved by the council and environmental authorities, construction will begin soon. The opening date is scheduled for 2020.

“I am delighted that the LVMH Group is contributing to this ambitious project and is helping the city of Paris further strengthen its appeal and attractiveness, both nationally and internationally, promoting the strength and diversity of our country’s culture, along with its unique artisanal excellence,” said Arnault.

“This initiative creates links between the Fondation Louis Vuitton, which is dedicated to artistic creativity, the vast amusement park at the Jardin d’Acclimatation, and this exceptional site that will celebrate the vitality of craftsmanship, the arts and artistic performance. We are proud to bring the same enthusiasm and ambitious vision to this new institution.”

Anne Hidalgo said she was “delighted that our city is attractive to private investors and that they are actively committed to its development,” adding that it sends “a powerful message to young generations that artisanal craftsmanship offers tremendous potential and opportunities that we encourage them to discover and seize.”