The new Museum of Liverpool is to receive £5m in European aid.

Work on the museum to replace the Museum of Liverpool life, is expected to be completed in 2008.

The Merseyside Objective One award for the £31m Pier Head construction project follows £26.8m from the Northwest Regional Development Agency (NWRDA).

The European grant was welcomed by Culture Minister David Lammy who said it would help provide a "fitting showcase" for the city.

The new X-shaped building at the Mann Island site will provide more exhibition space.

Planned exhibits will include a 19th Century locomotive that ran on England's first passenger railway line between Liverpool and Manchester.