Manchester Museum, which is on Oxford Road, hosts a collection which includes archaeology, anthropology and natural history and is owned by the University of Manchester. It provides access to about 4.5 million items from every continent.
It is embarking on a £11.5 million capital expansion, which will include a much larger space for temporary exhibitions, a new entrance and expanded public facilities.
The Director of the museum, Dr Nick Merriman, said: 'I am delighted that the Chancellor has announced this funding. It means that, with a commitment from the University, we have already raised over 50% of the funding needed to deliver the facilities we need for the Manchester Museum to engage with larger and broader audiences."
The new South Asia gallery reflects Manchester's strong historic links with the Indian sub-continent, which resulted from the textile trade. The gallery will be developed in close consultation with local communities.
The gallery will also draw on some of the best of the national collections of the British Museum.
Neil MacGregor, Director of the British Museum said: "The South Asia gallery at Manchester Museum is the latest in a series of partnership galleries which the British Museum has undertaken with key UK partners. The £5 million announced by the Chancellor is a significant investment which will benefit local and national and global audiences alike."
Dr Merriman added: "The South Asia gallery will be a great draw for local residents and tourists alike, and is the natural outcome of our partnership work with the British Museum, which has been developing for more than a decade."
Since 2003 the British Museum has worked with a number of museums, from Cornwall to Glasgow, to develop a series of Partnership Galleries. The British Museum holds in trust for the nation and the world a collection of art and antiquities from ancient and living cultures.
The origins of The Manchester Museum lie in the collection of the Manchester manufacturer and collector John Leigh Philips (1761-1814). After his death, a small group of wealthy men banded together to buy his 'cabinet', and in 1821 they set up the Manchester Natural History Society. The museum expanded in 1977 into a former Dental School.
In 1997 the museum was awarded a £12.5 million grant from the Heritage Lottery Fund and this, together with money from the European Regional Development Fund, the University of Manchester, the Wellcome Trust, The Wolfson Foundation and other sponsors enabled the museum to undertake the refurbishment and building which opened in 2003. Its collections, including dinosaurs, mummies and live animals, are designated by the government as being of national and international importance.
The museum is open daily, 10am - 5pm (closed 24th - 26th December and 1st January).
Refreshment can be found at Café Muse, with breakfast, lunch and afternoon menus.