The Vaud government has decided unanimously to house the new cantonal fine arts museum in a huge Swiss Railways train depot in Lausanne.
Wednesday's announcement brings an end to heated local debate. Some 11 possible locations across the canton were competing for the new museum.
The new museum, which will cost an estimated SFr70-80 million ($67-76 million), is expected to open its doors in 2014.
"It's an emblematic choice for culture in the heart of the city, in the heart of the lives of the population," said Vaud's culture minister Anne-Catherine Lyon.
The current cantonal fine arts museum is housed alongside other cultural institutions in the cramped Renaissance-style Palais de Rumine building in central Lausanne. Limited exhibition space means that only five per cent of the rich collection is visible at any one time.
On November 30, 2008, 53 per cent of local voters rejected a controversial project to build a modern new museum at Bellerive in Lausanne on the shores of Lake Geneva.
swissinfo.ch with agencies