Celebrated art collector Charles Saatchi is gifting more than 200 works and his Saatchi Gallery to the nation, he announced today.
The works, by artists including Tracey Emin, Jake & Dinos Chapman and Grayson Perry, are worth more than £25 million.
The Saatchi Gallery in London's Chelsea will become the Museum of Contemporary Art, London (Moca London).
The works will be donated to the Moca London foundation and the Saatchi Gallery is in discussions with potential Government departments, which would own the works on behalf of the nation.
The permanent collection that Saatchi is gifting includes the Richard Wilson Oil Room installation, and Emin's signature work My Bed.
The Chapman Brothers' work Tragic Anatomies, with mutated mannequins frolicking in a garden setting, last seen in the Sensation exhibition, will be another major holding.
Also included is the recent installation by Emily Prince, which filled a gallery room with more than 5,000 drawings of dead US servicemen and women from the conflicts in Iraq and Afghanistan, which she continues to build upon with the death of each soldier.
Another recently-seen work is from the Saatchi Gallery's Indian show, with a wall of bones forming the text of a speech by Gandhi, by Indian artist Jitish Kallat.
From the gallery's 2009 survey of Middle Eastern artists, the Kader Attia room of hundreds of life-sized praying figures made from aluminium foil will also form part of the museum's permanent collection.
The disturbing work Chinese Offspring by Zhang Dali, with life-size naked figures strung up by their feet from the rafters, will also be included.
The museum will be free to display artworks at all times, but when they are not being exhibited, the Government body may lend the works to other institutions.
A statement issued on the collector's behalf said: "Saatchi's view is that it is vital for the museum always to be able to display a 'living' and evolving collection of work, rather than an archive of art history."
Alongside a permanent collection, the gift will include several works which the museum may trade, using the cash raised to acquire new works.
New acquisitions will be added to the foundation's holdings to enable the museum to remain involved in spearheading the "newest developments in contemporary art".
This would continue in the traditions followed by the Saatchi Gallery since it began presenting public exhibitions a quarter of a century ago.
The London gallery sat in first place out of the UK attractions in a recent league table of global exhibition and museum attendance figures carried out by the Art Newspaper.
The Saatchi Gallery's exhibition The Revolution Continues: New Art from China, which opened in October 2008, drew more than 4,100 daily visitors.
The statement said the Saatchi Gallery's management team will ensure that the museum will continue to be free to the public, and run as it is today by securing sponsorship, and by using revenues from its facilities and hosting events.
The enigmatic millionaire, known for capturing the zeitgeist by snapping up the work of emerging talent, has been hailed as "the most powerful man in British art".
Married to TV cook Nigella Lawson, the 67-year-old told The Observer a year ago: "Art collectors are pretty insignificant in the scheme of things.
"What matters and survives is the art. I buy art that I like. I buy it to show it off in exhibitions.
"Then, if I feel like it, I sell it and buy more art. As I have been doing this for 30 years, I think most people in the art world get the idea by now."
The museum will aim to continue collaborations with other galleries in the UK and around the world, including the State Hermitage in St Petersburg, Russia, for which it has produced exhibitions of recent US and UK art.