The building will also house historic aircraft normally displayed outside.

The �4.9m grant from the Heritage Lottery fund will make up the �12m needed for the extension.

It will allow the owners to set up what is believed to be the UK's first exhibition on the Cold War.

The new building, which is expected to be finished in 2006, will also house historic aircraft normally displayed outside.

John Francis, the museum's General Manager, said the project is expected to attract an extra 50,000 tourists to the area.

"People will come from all over the world to see the Cold War exhibition," he said.

Heritage Lottery Fund's Regional Manager Anne Jenkins said the Cold War had affected many lives.

"This significant part of our history will be brought to life for all generations to explore."

The Cold War display will feature British, American and Soviet aircraft and missiles.

Plans also include the suspension of a Meteor and a Jaguar jet from the ceiling of the building with an elevated viewing gallery for visitors to see the planes hanging in mid-air.

The project has also attracted �1m from Advantage West Midlands, �1m from the Ministry of Defence, �300,000 has been raised by the museum itself and �3.8m is expected from the Government Office for the West Midlands.