Iraq is planning to open its first new major museum since its occupation in 2003, with an art institution to open inside the former palace of President Saddam Hussein later this year.

Funded through UK-based charity Friends of Basra Museum and oil company donations, the former stronghold of Hussein in Basra will become “the principal museum in southern Iraq and a model museum for the region”, according to the Iraqi government.

Following Hussein’s capture in late 2003, the palace was used as a mess hall for the British army. In 2010, the palace was handed over to Iraq’s State Board of Antiquities when the plan for a culture hub was devised.

The palace, currently undergoing a US$3.5m (€3m, £2.5m) redevelopment, will be split into four sections exhibiting artefacts from the civilisations of Sumer, Babylon and Assyria, while there will also be an area dedicated to Islamic art. The palace will hold around 4,000 works, many of which will come from Baghdad’s semi-operational Iraq Museum.

The palace has suffered significant damage from car bombings since the US occupation of Iraq, so safety is at the heart of the redevelopment with steel doors installed at the entrance for extra security, while money is also going towards repairs and curatorial support.

“We want to make this a heritage area with hotels and restaurants and a heritage museum, but being sure that people still live here,” said Qahtan al-Abeed, director of Iraq’s State Board of Antiquities and Heritage for Basra, speaking to National Geographic. “We want to make this like Granada in Spain, but this is a 15-to 20-year project.

“Most people from Basra came here recently from the countryside, and they have no idea of culture. You have to first lay the foundation. And I want to help my country.”