How one museum's new design is helping to lift art out of the darkness

The opening of an airy, light-filled extension to Madrid's Prado museum means that a collection of 19th-century artworks, hidden for more than a decade, can now be seen in all its glory. Elizabeth Nash reports

Seven years late, Madrid's Prado museum is finally about to greet the 21st century. Spain's historic treasure-house of art, the latest of the world's great art museums to renew its cramped and dilapidated premises, opens Rafael Moneo's ingenious and heart-warming extension this month with an exhibition of the Prado's best 19th-century works, hidden for a decade.

"We've brought the museum from the 19th into the 21st century, almost skipping the 20th century. It was time. The Prado had lost its way, it was drifting without direction, but after a long transition we got it right, and this is our happiest moment," says Miguel Zugaza, who became director nearly six years ago, when morale was at its lowest. "Our strength was always our collection – one of the finest in the world – but we needed more room, better communication with the public, and better conditions for our world-class research and restoration team. This is our most ambitious expansion in 200 years."

He likens Spain's great Enlightenment institution to a slumbering lion, sprawled along the capital's finest boulevard, now shaking its mane, flexing its muscles and rising up with a new spring in its step. Moneo's extension frees up 25 galleries from the original building designed by Juan de Villanueva in 1785, leaving it devoted entirely to art.

It has created half as much exhibition space again, enabling up to 400 more paintings to be shown – jewels drawn from a sack of treasures holding more than 8,000 works. The addition exploits to the full Madrid's most spectacular asset, its long hours of sunshine, directing pools of natural light into new galleries deep underground. And it welcomes, rather than overwhelms you. This is discreet architecture. Moneo was constrained by a suffocating brief, but the gentle result seems in keeping with today's spirit, and the historic surroundings.

Gabriele Finaldi, chief curator and Zugaza's right hand, takes me through the new entrance behind the main building, and explains with enthusiastic arm gestures the logic of this creamy open space built of wood, granite and brick and bathed in natural light. "Visitors can get their bearings here before deciding which bit of the museum to see: temporary exhibitions to the left, lectures in the auditorium to the far left, permanent collections in the main building to the right, or you can mill about, browse the bookshop or visit the café. In the past, you were plunged straight into rooms full of art."

Before we pass into the main building, Finaldi points out a distant high window that frames the leafy Botanical Gardens next door – Moneo's nod, he guesses, to the far doorway in Velazquez's masterpiece Las Meninas. A curved corridor of cardinal red stucco leads us to the Villanueva building, into a high circular chamber now housing eight ancient statues of the muses, with rosy bronze doors leading to the main collections left and right.

Ahead is the main entrance on Villanueva's neo-classical façade that faces the Paseo del Prado, a spectacular portal flanked by pillars and statues, spruced up and reopened after being shut to the public for decades. Two narrow galleries parallel to the long façade have been freed up, their high arches and tall windows a revelation in spaces formerly cluttered by a cramped bookshop and a workshop for sculpture restoration.

Returning through Moneo's concourse we head for the new galleries where canvases lie propped against deep blue, or gunmetal, or dove-grey walls. White-coated, gloved technicians ponder the arrangement of the exhibition that marks the museum's relaunch on 31 October: Modern Masters – The Prado's 19th-Century Collections. "I felt it was important to select the best we've got, and not make this an encyclopaedic show; to illustrate the peaks of 19th-century paintings in Spain. We are keen to pick out the links with the historic Prado collection," Finaldi says.

We move from a romantic nation-boosting scene by Eduardo Rosales of Queen Isabel the Catholic on her deathbed to a joyous Joaquin Sorolla beachscape that anticipates Impressionism. In a darkened room is a selection of the museum's Goya drawings, including the recently acquired Toro Mariposa, a brooding image of a flying bull with butterfly wings, to be shown publicly for the first time.

These 19th-century works used to be housed in the Prado's nearby Cason del Buen Retiro, the ballroom of the 17th-century former royal palace. But they dropped from view when the Cason closed for repairs 10 years ago. The plan is to move them permanently into the Villanueva building, to form a continuation of Goya's era to the brink of the 20th century.

Imperceptibly, we have moved deep underground. One of the peculiarities of the site, producing an architectural headache, is that Villanueva's building backs into a hillside. And on the hill stands the ruined 17th-century cloister used by Spain's Habsburg and Bourbon monarchs that Moneo had to incorporate into his design.

An escalator lifts us to the foursquare arched cloister, every granite piece of which was dismantled, restored and returned to its original spot following protracted negotiations with the Vatican. To rumbles of discontent from Madrileños, who felt that a precious piece of their skyline was being shrouded, Moneo encased the ruin with a brick wall, letting light filter through the ruined arches from a glass roof. The space now houses 16th-century Leoni statues formerly buried in a gloomy basement.

"Sculpture asks for natural light and an architectural background," Finaldi says with pride. "These were ruined parts of a private building, now restored for the enjoyment of the public," he adds, tacitly countering any lingering opposition. The cloister overlooks a geometric garden of clipped box hedging that covers the roof of Moneo's extension, and airy galleries devoted to restoration work.

What you see is only part of what you get. "We are experiencing a new springtime of knowledge and research because everything is now more accessible," says Finaldi. "In the past, paintings were stacked 10 deep, and if you wanted number nine, it was difficult to get." Now each work can be accessed instantly from state-of-the-art sliding storage in new basement storerooms, and brought up in a lift the size of my flat. Of the museum's 8,000 artworks, more than 3,000 – the so-called "dispersed Prado" – are on loan to museums around the country, 1,000 are on display in Madrid, leaving some 4,000 in store, a 50-50 ratio he reckons is comparable to other galleries. "We try to show the best of what we have, and rotate them regularly. Of course, we'll be bringing out more now."

In his office in an undistinguished 1970s block beside the enclosed cloister, Zugaza resists talk of a relaunch. "The museum doesn't change. It's the same museum with more room." He praises Moneo, who also converted the 19th-century Villahermosa palace across the road to house the Thyssen collection, and recreated the nearby 19th-century Atocha station to accommodate the high-speed train, "as the best kind of conservative... He didn't want to create a new icon, but to extend and reveal the qualities of our main building". And restore the Prado's identity as an institution of great intellectual authority.

"The museum is only the container, enabling the public to interact with works of art. That is an absolutely individual experience that the Prado cherishes: the collection is what matters," Zugaza insists. Indeed, the inauguration – to which representatives of the world's top galleries are invited – marks just a moment in an ongoing renewal process. The Cason, with its 17th-century vaulted ceiling decorated by the Neapolitan Luca Giordano, opens next year as the Prado's own art school for advanced research and study, with library and documentation centre. It aims to strengthen the museum's academic standing, and demonstrate it can do more than mount blockbuster exhibitions. Recent shows, such as that on Tintoretto, "have produced definitive works of reference for many decades," Zugaza says.

Then there's the Salon de Reinos, the surviving wing of the 17th-century royal palace, its interior decorated by the court painter Diego de Velazquez, whose great portraits once hung there. Until recently it housed the Military Museum, which moves to Toledo next year, leaving the Prado to recover the building as part of a "Prado campus", and possibly to bring Velazquez and Zurbaran masterworks back to their original home.

A decade ago, the Prado made the headlines chiefly for its revolving-door directors. It was a time when the roof was so dilapidated that raindrops dribbled around Velazquez masterworks; when a fake was glued to the wall in a room containing the museum's only Rembrandt and no one noticed for five days; or when a spokesman hailed as an unknown Goya a painting already catalogued in the museum's own archives as by a lesser artist. The chaos of those days is long passed. Years out of synch, but with perfect timing, the Prado unveils its new look just as the world's already renovated art museums start to look a bit jaded.

In the immediate future, a celebration of the Prado's El Greco collection opens in December, a Fables of Velazquez show opens in January, and a Goya festival marks next spring's 200th anniversary of Spain's war of independence against Napoleon. The museum is free for two hours every day, and – if you register early – throughout November as an "invitation to the public". A record two million people visited the Prado this year, 18 per cent more than last. Still more are expected to flock through the doors to witness the rejuvenated old girl shake out her finery.