Damien Hirst, Controlled Substance Key Painting (Spot 4a), 1994. © Damien Hirst

An incredible collection of artworks valued at approximately £125million has been acquired for the National Galleries of Scotland (NGS) and Tate.

Anthony d’Offay’s ‘Artist Rooms’ collection comprises 725 works by such renowned artists as Gilbert and George, Joseph Beuys and Andy Warhol, collected over a 28-year period. They represent one of the most important holdings of modern and contemporary art in private hands (until now).

Anthony d’Offay – the pre-eminent London art dealer of the 1970s to 1990s – is transferring the works to the public collections in a part-gift, part sale-at-cost agreement. In a philanthropic gesture, he will receive only the original purchase cost of the works, £26.5million.

"This is a hugely significant acquisition for the National Galleries and for Scotland - it adds real weight to the cultural renaissance we are experiencing here, which includes the establishment of a national cultural development body in Creative Scotland," said Scotland's Culture Minister, Linda Fabiani.

"I know that Mr d'Offay has a strong connection with Scotland from his days studying at Edinburgh University and I extend my thanks for the generous gift he has passed on for the good of this nation."

Born in Sheffield in 1940, Anthony d'Offay studied art at Edinburgh University, graduating in 1962. Whilst at the University, he fell in love with the collections of the National Gallery of Scotland. Years later he described walking round the galleries on The Mound as “the defining experience of my life”.

Robert Mapplethorpe, Patti Smith, 1979. © Robert Mapplethorpe Foundation. Used by Permission

Behind the total funding package of £28million enabling the acquisition are The Art Fund (£1m), the Department for Culture, Media and Sport (£10m), the National Heritage Memorial Fund (£7m) and the Scottish Executive (£10m).

“Anthony d’Offay's exceptional generosity has given us a once in a lifetime opportunity to transform the nation’s collections of the very best international modern art,” said David Barrie, Director of The Art Fund. “The Art Fund, the only private sector contributor to the funding package, has given the second largest grant in its history to ensure that this extraordinary collection can be a source of inspiration to everyone throughout the UK, now and always.”

NGS and Tate formed an alliance in 2006 to attempt to jointly acquire the collection, after d’Offay began discussions with international museums about the future of his holdings. D’Offay had a huge impact on the appreciation of contemporary art in Britain in the late 20th century, backing the Young British Artists and bankrolling Rachel Whiteread’s Monument on the fourth plinth in Trafalgar Square. The closure of his Dering Street gallery in 2002 came as a surprise to the art world, given its great financial success in representing the YBAs.

As well as going on show at the National Galleries of Scotland and Tate, it is intended that the Artist Rooms will tour the UK. The Art Fund hopes that Anthony d’Offay’s generous act of philanthropy will inspire further lifetime gifts by other collectors, and encourage international contemporary art collecting by UK galleries.

"This is about trying to make something happen in a place where it will really make a great difference to young people, their appreciation of themselves and their era," commented Anthony d'Offay. "It will inform what they do with their lives and how they see the world."

Gilbert & George, Existers, 1984. © Gilbert & George

The Artist Rooms consists of 50 ‘rooms’ devoted to 25 artists and an additional 10 works by seven artists. It will be jointly owned and managed by National Galleries of Scotland and Tate, who have asked Anthony d’Offay to serve as an unpaid ex officio curator for a period of five years.

The museums are also setting up an endowment of £5million to enable the collection to add further rooms and have each contributed an initial £500,000 of their own funds as part of this agreement.

Collection highlights: Diane Arbus (3 rooms), Joseph Beuys (5), Vija Celmins (1), Ian Hamilton Finlay (1), Gilbert and George (2), Johann Grimonprez (1), Damien Hirst (1), Jenny Holzer (1), Alex Katz (1), Anselm Kiefer (3), Jeff Koons (2), Jannis Kounellis (4), Sol LeWitt (1), Richard Long (2), Robert Mapplethorpe (3), Agnes Martin (1), Ron Mueck (1), Bruce Nauman (2), Gerhard Richter (3), Ed Ruscha (1), Robert Therrien (2), Bill Viola (1), Andy Warhol (6), Lawrence Weiner (1), and Francesca Woodman (1). In addition, there are ten works by a further seven artists: Georg Baselitz, Ellen Gallagher, Richard Hamilton, Mario Merz, Charles Ray, Robert Ryman and Cy Twombly.

“A gift of this magnitude will completely transform the opportunity to experience contemporary art in the UK," said Nicholas Serota, Director, Tate. "Anthony d'Offay’s imaginative generosity establishes a new dynamic for national collections and is without precedent anywhere in the world.”

A series of opening displays will be launched in spring/summer 2009 and staged at Tate, the National Galleries of Scotland and a wide range of partner museums and galleries across the UK. The initial partners include Aberdeen Art Gallery and Museums; De La Warr Pavilion, Bexhill; Firstsite, Colchester; Glasgow Museums; Inverness Museum and Art Gallery; National Museum of Wales, Cardiff; New Art Gallery, Walsall; MIMA, Middlesbrough; The Pier Arts Centre, Orkney; Ulster Museum, National Museums Northern Ireland and Wolverhampton Art Gallery.