The Mayor of London and the City of London have committed an additional £25m each toward the renovation costs of old market buildings in Smithfield, which will house the new London Museum, formerly the Museum of London.
Originally expected to cost around £337m and open in 2026, the project's costs are now forecast to have risen by £100m.
While the newly announced funds will help bridge the funding gap, the museum is looking at "green loan opportunities" to secure a further £20m.
The City of London has contributed £222m to the project in total, while the Mayor of London has awarded £95m. Meanwhile, private donations and sponsorships have generated £45m so far.
Contributions include £10m each from the Worshipful Company of Goldsmiths and the Linbury Trust, £5m each from the National Lottery Heritage Fund and the Garfield Weston Foundation and £1m each from the Schroder Foundation and Family and the Wolfson Foundation.
“Thousands of Londoners are helping to shape this fantastic new museum, which will not only explore our city’s rich history but the people and places that make it such a vibrant place to be," said Director of London Museum, Sharon Ament.
"With the generous support of the GLA and the City of London Corporation, alongside our other funders and supporters, we are steaming ahead to deliver a transformative, world-leading museum that will be worthy of this great global capital.”