The new museum is expected to be ready for 2008

The waterfront building shut on Sunday to allow building on the new �65m Museum of Liverpool to begin.

The new X-shaped building at the Mann Island site will provide more exhibition space.

National Museums Liverpool says that the current building is too small to house the city's collections.

The current museum tells the story of the people of Liverpool, their culture and their contribution to national life.

The North West Development Agency promised more than �30m in funding for the new museum.

Planned exhibits will cover social history and popular culture, and will look at Britain and the world through the eyes of Liverpool.

It is expected to be built in time for Liverpool's year as Capital of Culture in 2008.