Sources said the Indian partner of the London-based museum and the owners of the building have "finalised" the decision and work on it will start in the next two months. The British-designed building had come up in 1932.
"The site has been chosen considering its prime location since the objective of the museum is to attract tourists to the city. Work will start in the next one to two months and it will come up by 2017," the source said.
"The hall is owned by Vinay Kumar Mahajan and I do not think it will be shut down. It occupies only the ground floor of the building which has a number of shops and other establishments," Roop Ghai, the manager, said.
Earlier, in January, Wizcraft Entertainment International, the Indian partner of Madame Tussauds had written to Kejriwal requesting for his consent installing his waxwork figure at the museum, which the CM has accepted.
Modi also gave the museum's team of artists and experts a sitting at his residence in New Delhi earlier this year.
