Saatchi gives up his art – and his name – for the nation

Collector's eponymous King's Road gallery to be handed over and renamed Museum of Contemporary Art

As an entrepreneurial ad-man turned art impresario, Charles Saatchi is famed for his ability to discover the next big thing.

So good are his instincts that he virtually founded the Young British Artists movement of the 1990s and swiftly bought up the best of their work for ostentatious displays in his eponymous gallery. Now, it appears, after decades of amassing one of the most lucrative collections of contemporary art, he is giving it away.

Yesterday, the art world buzzed with excitement as Mr Saatchi announced that he was giving his majestic gallery, which lies off the King's Road in London, to the nation, and throwing in more than 200 works for good measure. The entire gift is worth in excess of £25m, and from the few details revealed so far, it includes some iconic works including Tracey Emin's "My Bed" – an installation that gained so much attention that it became one of the best visited in the history of the Turner prize when it was shortlisted.

What makes the nature of the donation even more extraordinary is his insistence that the Saatchi Gallery will be renamed, with the more general title of Museum of Contemporary Art, after his as yet unspecified retirement from the art world.

This self-effacing gesture makes him unusual in the pantheon of art philanthropists, who normally like at least a room, a wing, or a building named after them – although it certainly maximises publicity for Mr Saatchi in the here and now.

An ever-elusive art collector, Mr Saatchi is famed for his reticence (he rarely gives interviews and chooses not to turn up to his own exhibition openings most of the time) and yesterday he typically maintained a silence over why the gift was being made now, and why it would not carry his name.

Rebecca Wilson, associate director of the Saatchi Gallery, spoke for him when she said he was adamant that the name should be changed. "He feels after he has left the building, it makes sense for London to have a big museum of contemporary art and that it should be called just that, so that people begin to think of this place as that. He has been very clear about that. He doesn't want his name attached to it when he retires," she said.

Ms Wilson said the management and staff of the gallery would become part of the gift, as well as revenues from the gallery – the sale of artworks, profits from its shop, restaurant and café – which would be ploughed back into acquiring new works of contemporary art. The majority of the 200 artworks will form the gallery's permanent collection – which will be displayed in its entirety in 2012, after which it can be lent to other galleries across Britain and the world.

Mr Saatchi has designated these works never to be sold, although a smaller proportion of the donation can be traded for new works by young, emerging artists, which will be exhibited in temporary shows.

Jeremy Hunt, Secretary of State for Culture, Olympics, Media and Sport, who has greatly advocated art philanthropy in Britain, appeared clearly delighted by the gift.

"Charles Saatchi has built up a collection of huge international importance. His decision to gift these works to the nation is an act of incredible generosity and I'd like to thank him on behalf of the Government. Philanthropy is central to our vision of a thriving cultural sector and this is an outstanding example of how Britain can benefit from individual acts of social responsibility," he said.

Ms Wilson said Mr Saatchi chose to donate in this way rather than giving his collection to a gallery such as Tate Modern, as he wanted it to be a "living museum".

"Charles Saatchi is passionate about contemporary art. He feels excited about the idea of the gallery existing in the future and continuing to do what other art organisations do not do. It is not a repository for art or an archive of art history.

"What we want to enable is to go into the Royal Academy degree show, for example, and buy the work of an exciting young artist... We want the gallery to be a place where people discover new, fresh work," she said.

The building which houses Mr Saatchi's collection is owned by the Cadogan Estate, the owner of Duke of York Square in Chelsea, where the gallery is located. Mr Saatchi will continue to own many hundreds of works privately.