The Lucas Museum of Narrative Art is set to be built in Los Angeles, after the City of Angels was selected over San Francisco to be the home for what should be a Star Wars fan's paradise.

Valued at $1 billion, it will be funded by Lucas himself. Not only will it sit alongside the Natural History Museum of Los Angeles County and the California Science Centre in Exposition Park, but it will be in close proximity to the University of Southern California, where Lucas studied film and met Steven Spielberg.

The storytelling museum will house an exhibition of the director's vast collection of paintings, illustrations and digital art from the Star Wars franchise, according to a Reuters report.

Plans to build it in Chicago were scrapped last year after legal challenges from an open-spaces group.

Los Angeles mayor Eric Garcetti said of the decision:

"I believed in the vision for the Lucas Museum, and we went after it with everything we have – because I know that LA is the ideal place for making sure that it touches the widest possible audience."

The museum's board of directors stated:

"South Los Angeles's Promise Zone best positions the museum to have the greatest impact on the broader community, fulfilling our goal of inspiring, engaging and educating a broad and diverse visitorship."

Lucas sold his famous movie franchise, which initially wowed global cinema audiences in 1977, to Walt Disney for $4bn in 2012.

Since then, Disney has delivered the first in a new trilogy of movies with 2015's The Force Awakens and recently launched a series of standalone films with Rogue One: A Star Wars Story. 

The Force Awakens was a record-breaking smash, becoming the fastest flick to gross $1bn after the biggest opening weekend in history and surpassing Avatar as the highest-grossing film in US box office history. It was confirmed this week that Rogue One is now the second highest-grossing installment in the Star Wars franchise. Disney has revealed plans for a total of six films.