Main construction will start late this year.
The government had already announced that it will contribute up to £75m towards construction costs, to be supplemented by £25m from charitable donations.
The new Holocaust Memorial will be the national focal point to honour the six million Jewish men, women and children who were murdered in the Holocaust, and other victims of Nazi persecution, including the Roma, gay and disabled people.
The co-located Learning Centre will also focus on subsequent genocides in Cambodia, Rwanda, Bosnia and Darfur.
Communities secretary Robert Jenrick said: “This is an important moment for the whole country: today’s decision means that the National Holocaust Memorial and Learning Centre will be built in the heart of Westminster, right next to Parliament.
"The government will now move forward with the construction of the memorial, which will start later this year. We have a duty to ensure that the history of the Holocaust is never forgotten and never repeated – the Memorial and Learning Centre will allow everyone to reflect, remember and honour those who suffered and died and to educate future generations in anti-Semitism, where, if unchecked, antisemitism and hatred can lead.”
Sir Ben Helfgott, Holocaust survivor, said: “Holocaust survivors like me came to the UK after liberation, and we made Britain our home; British forces liberated my sister at Bergen-Belsen concentration camp. The Holocaust is part of British history. I am proud that the UK Holocaust Memorial and Learning Centre is being built, in the heart of our country, so it can be visited by millions. I know that long after I, and the other survivors, are gone, the UK will continue to remember the Holocaust and learn what happened when hatred reigned.”
In January 2016 the then prime minister announced that the chosen location for the Memorial was Victoria Tower Gardens, Westminster. After an international competition, with 92 entries in total and ten finalists, Adjaye Associates, Ron Arad Architects and Gustafson Porter & Bowman were selected unanimously as the winning team. The announcement was made on in October 2017.
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