Moco Museum will take over a sprawling 1920s building opposite Marble Arch for its third European gallery after plans were approved by Westminster City councillors on Monday night.
The venue on 1 Marble Arch and 1 Great Cumberland Place could showcase works by eminent artists such as Banksy, Tracey Emin, Andy Warhol, Yayoi Kusama and Damien Hirst.
It is set to open in 2024.
Kay Buxton, chief executive of the Marble Arch London BID, said it was a “vote of confidence” in the West End.
“Marble Arch has become a magnet for culture and leisure operators following its transformation, with this investment by Moco the latest boost,” she said.
Geoff Barraclough, Cabinet Member for Planning and Economic Development, said he was “thrilled” to welcome Moco to Oxford Street.
“The arrival of the Moco supports our vision for Oxford Street as a destination featuring a mixture of world class retail interspersed with other uses that bring something different and exciting for shoppers, tourists, workers, and local residents,” he said.
The building at the top of Oxford Street was initially planned for offices and shops, but the lower and ground floors will now be used by the art museum under a change-of-use.
Under the approved plans, the museum will have a maximum capacity of 431 people and will be open from 9am to 9pm daily. It will employ around 45 full-time members of staff.
Moco runs two other galleries in Europe, with its Amsterdam venue opening in 2016 and its Barcelona venue opening in 2021.
Venus Williams was among those who praised Moco’s Banksy exhibition, describing its Amsterdam venue as “one of my favourite museums”.
Meanwhile, Barack Obama and Steven Spielberg were among those visiting Moco’s Modern Masters show earlier this year, according to the company.
It comes as a Westminster Council meeting was told that the number of candy stores on Oxford Street has fallen from a peak of 29 to 21 after a crackdown.
A report to be discussed by the Labour-run council’s overview and scrutiny committee on Wednesday states: “We have ramped up the pressure on Candy stores, souvenir and vape shops, to make clear the status quo is not acceptable.”