The Industrial Museum would be revamped with some of the money

The new 'Museum of Bristol' will "tell the story of the city and its people", according to the city council.

The funding includes �853,000 which will help transform the city's Industrial Museum into a new attraction to house exhibits in storage

It is hoped that the Museum of Bristol, which will cost more than �18m in total, will open in 2009.

Councillor Anne White said: "Bristol City Council is thrilled with today's announcement.

"The pledged funds and the development award allow us to take a major step forward with one of the city's key priority projects and begin detailed planning.

"This is a major boost for the Museum of Bristol project and is key to the continued regeneration of the city's historic harbourside."