Plans to create a dedicated gallery to showcase artefacts from the Staffordshire Hoard of Anglo-Saxon gold have been handed a £700,000 boost by the Heritage Lottery Fund.

Birmingham Museum and Art Gallery said the grant would help it to create a permanent display of around 300 items from the hoard, which was unearthed near Lichfield in 2009.

Due to open in September next year, the new exhibition will outline the story of the 7th century hoard from its creation and original use to its rediscovery and conservation.

Items from the 3,500-piece hoard, which is valued at £3.2 million, are currently on display at Birmingham Museum and Art Gallery, The Potteries Museum and Art Gallery in Stoke-on-Trent, Lichfield Cathedral and Tamworth Castle.

Welcoming confirmation of the £704,500 grant, Simon Cane, director of Birmingham Museums Trust, said:"The Staffordshire Hoard is our Tutankhamun - an internationally significant cultural and historical asset of such magnitude that it deserves the very best in its display."

Reyahn King, the head of Heritage Lottery Fund in the West Midlands, said: "The Staffordshire Hoard is of international significance, and for locals and visitors to have access to a new permanent display in Birmingham is fantastic news for both tourists and locals alike with the resulting investment it will bring to the city."

The first objects from the hoard went on temporary display at Birmingham Museum and Art Gallery in September 2009 and have been on continuous display there since March 2010, attracting more than 590,000 visitors.