The Museum of London has officially started its search for an architect to design its proposed new home inside a vacant Victorian market.

Design competition organiser Malcolm Reading Consultants has been appointed to lead the search. A two-stage contest will begin in February 2016. A panel will be selected to create a shortlist and the winning architect will be announced by the end of Q2 2016.

The museum and the City of London Corporation – which has bought the leasehold for the new site in central London’s West Smithfield locality – are aiming to receive planning permission, raise the necessary capital funds and deliver the new museum by 2021.

The new facility will be located within a 25,000sq m (269,000sq ft) market complex comprising several 19th Century buildings, including a general market and a fish market.

“It’s a challenging site with a strong identity and a robust setting,” said competition organiser Malcolm Reading. "The museum’s ambition to create a dynamic cultural destination here is inspirational. This is a project which will intrigue the global design community."

Sharon Ament, director of the Museum of London, pledged to identify “a world-class, outstanding and inspiring architect who will deliver a design which combines stunning modern vision for a new museum with West Smithfield’s sensitive heritage”.

A £200,000 (US$287,500, €263,200) grant from the Mayor of London’s office has been provided to fund the competition. London mayor Boris Johnson said this would enable the museum “to conduct a global search and ultimately create a major cultural destination and a new landmark for the capital," which will continue to tell the story of London and its residents.

The museum first announced plans to relocate in March 2015, with management citing a number of problems at its current site including poor accessibility, an ageing building and a poor location.

Although two other options – improvements to the Powell & Moya-designed building and developing a new building on the existing site – were considered, the Smithfield relocation was deemed most viable by museum bosses.