The museum, dedicated to the painter and his muse and second wife Jacqueline Roque, will open in 2021 in the heart of the region Pablo Picasso called home for much of his life.
It is expected to have 1,000m² of permanent exhibition space, featuring many paintings, drawings and sketches never seen before, as well as 500m² for rotating exhibitions.
The 2,000 artworks were inherited from Ms Roque by her daughter Catherine Hutin-Blay, Picasso’s stepdaughter.
At the time, ownership was disputed by other members of the family as the artist left no will when he died in 1973.
Legal battles blocked earlier plans to put the works on show.
When the way cleared, Ms Hutin-Blay persuaded authorities in Aix-en-Provence to sell her the former convent Collège des Prêcheurs and the Déambulatoire de l’Eglise de la Madeleine in the city centre for €11.5million.
Some council members opposed the move, saying the buildings were worth more, and finalising the sale took longer than expected.
A further delay came with a decision that archaeological digs had to be carried out before work on the museum could start, but the mairie confirmed that everything is now on track.
“It is a big event for the town, and we look forward to it,” said a spokeswoman. “We expect a significant boost from it.”
The paintings, drawings, sculptures, ceramics, and photographs are dated between 1952 and 1973, the years when the couple lived in the South of France.
They were buried side by side at the Château de Vauvenargues, 15km from Aix-en-Provence, a property Picasso bought in 1958 and lived in until 1962, before moving to Mougins, near Cannes.
Biographies claim Picasso did not like selling his work, especially if he thought it was unfinished. When he became rich and famous, he started keeping more, which is why so many works were inherited.