The attraction, which is set to open in Spring 2005, is expected to draw more than 300,000 visitors a year.

There is a great deal of excitement in Swansea that this massive new development will rekindle opportunities for people in Swansea Iwan Davies, Swansea Council

On Monday, First Minister Rhodri Morgan laid the foundations for the work on the museum, which will form a cornerstone of the regeneration of the city's maritime quarter.

The facility will tell the story of Wales' industrial and maritime heritage and its role in shaping its economy and society.

The new building will incorporate much of the Grade Two listed warehouse which previously housed the Swansea Maritime & Industrial Museum.

A waterfront terrace overlooking the collection of historic ships will be added to its dockside frontage, with a glazed section leading to a series of new two-storey galleries clad in glass and slate.

Entry into the attraction, which is a partnership between the National Museums & Galleries of Wales and the City and County of Swansea, will be free.

Rosemary Butler AM, who chairs the company overseeing the project, said the facility had international importance.

Rhodri Morgan laid the museum's foundations

"Industrial developments as well as maritime developments in Wales actually created the world as we know it today," she said.

"It's important we show the past as well as looking to the future and that's what this museum is all about," she added.

Mr Morgan said the museum would "showcase the largest collection of maritime and industrial artefacts in Wales".

"It will tell the story of the huge social and economic forces that shaped Wales in the crucible of the Industrial Revolution," he said.

Thousands of jobs

The museum scheme, designed by Wilkinson Eyre Architects, is part of a wider £200m redevelopment of Swansea's waterfront area.

Thousands of jobs could be created as part of an "innovation village" around the city's Prince of Wales Dock.

Swansea Council's assistant director of cultural and support services Iwan Davies said the museum would play an important role in the development of the city.

"This magnificent new development is a significant step in the rejuvination of the maritime quarter," he said.

"There is a great deal of excitement in Swansea that this massive new development will rekindle opportunities for people in Swansea, and also be a visitor attraction that will attract over 300,000 visitors a year," he added.

Swansea was chosen more than three years ago as the location for the national museum beating off competition from Cardiff.