The pounds 80m new museum, twice the size of the present Tate at Millbank, north of the river, will come under the Tate and its director, Nicholas Serota, and will show much of its international 20th-century art collection. The present gallery will revert to its original purpose of showing the history of British art.
The vast Bankside Power Station, revealed as the chosen site in the Independent some months ago, will be sold to the Tate by Nuclear Electric plc. Mr Serota promised yesterday that it will equal the Pompidou Centre in Paris and the museums of modern art in New York.
Over the next two years, plant will be removed from Sir Giles Gilbert Scott's building, which opened in 1963. A tour around it yesterday showed the enormous scope it offers. Often described as 'a temple of power', it offers an eight-acre site dominated by a massive vaulted hall. While galleries are likely to be built with balconies, the feeling of great space underneath the vault is unlikely to be affected.
The building has an imposing exterior towering over the River Thames, and a huge roof garden space with striking views over much of London, including the river and the rebuilt Shakespearian Globe theatre just below.
There is also the possibility of allowing visitors to be taken up the 325ft chimney by lift for even more panoramic views.
The Tate, which plans to raise the pounds 80m needed for the purchase and development from a mixture of private funds and money from the new national lottery earmarked by the Government for millennium celebration projects, will open the museum of modern art in 2000. Later this year it will launch an international competition to find an architect to convert the building, currently largely disused, although a small part of it still serves as an electricity sub-station.
Mr Serota's plans include a footbridge across the Thames linking the new museum with the area around St Paul's Cathedral, and a boat service connecting the museum with the Tate in Millbank and other cultural centres along the river.
The Jubilee Tube line extension due to be completed before the museum opens will have a station next to the site.
And Mr Serota promised yesterday, in response to the Independent's campaign for the better use of cultural spaces, that there would be terrace cafes and public spaces, and that staff car parking would be banned from the forecourt.
The chairman of the Tate's trustees, Dennis Stevenson, predicted that the presence of the new museum and its regeneration of the Bankside area would encourage Japanese bankers to invest in the nearby City of London, in preference to Paris or Frankfurt.
He added: 'This will be the first national gallery to be built in Britain since the 19th century. The project shows that Britain is looking to the future and entering the 21st century in a creative spirit.'
John Gummer said that the Government would be backing the project, and that it was a key part of the regeneration of the south bank of the Thames.