A £14m Story Museum is to be created near Christ Church, to celebrate Oxford’s links with the greats of children’s literature.

The museum, set to attract more than 100,000 paying visitors a year, is to be created in a Victorian building in Pembroke Street.

A £2.5m gift from an anonymous donor has secured the three-storey Rochester House on a 130-year lease. The impressive site is made up of three linked buildings, together with a courtyard.

A public appeal will be launched to raise £11m to transform the building into a “world-class” new Oxford visitor attraction and a major teaching facility for schools.

The idea of a Story Museum was first put forward five years ago, with the author Philip Pullman becoming its first patron. Since then, events and storydays have been held for 10,000 children as the search for a permanent home began in earnest.

Kim Pickin, the director of the Story Museum, said: “Dreams do come true. We are absolutely delighted to have a real home at last. For the last few years we have only really existed as a virtual entity.

“Rochester House has its roots in the Victorian era, when Oxford became the focus of a golden era in children’s literature, producing children’s stories that are known and loved across the world.

“It is only a stone’s throw away from Christ Church and its famous links with Alice in Wonderland and Harry Potter.

“Lewis Carroll himself would have known the building. The museum will be open and accessible to all ages. We are sure the museum will make an important contribution to the local economy.”

It is hoped that the groundbreaking museum will open by 2014, in time for Oxford’s bid to become Unesco’s World Book Capital.

There are plans for performance spaces and a small theatre for story telling, puppet shows and visits by authors.

The site offers 20,000 sq ft of usable space that will also accommodate galleries, a cafe, shop, education rooms. storytellers’ studio, children’s play house and offices.

The Story Museum now has as its patrons three big names in children’s literature: Philip Pullman, Jacqueline Wilson and the former Children’s Laureate Michael Morpurgo.

Mr Pullman said: “The Story Museum will be a wonderful gift from Oxford, where so many stories have begun, to the whole world. The very idea of having a museum devoted to story is itself such a fantastical notion. No other city in the world could have given birth to it.”

Jacqueline Wilson said: “A museum devoted to encouraging children to read and enjoy stories is a wonderful idea. It’s especially fitting that it’s based in Oxford, which from Lewis Carroll onwards has always been associated with brilliant children’s literature.”

The project has also been welcomed by Oxford City Council and is part of its planning framework for the city centre.

The team say the design of the building must provide for “a high- impact family experience”, with the museum accessible to all ages, as well as being an important research centre.

The director said: “Not only will visitors listen to stories, they will walk through them, create stories of their own and, literally, be able to open windows and go through doorway into other worlds.”

The site was sold to the Postmaster General in 1921 and has previously been used as a sorting office and telephone exchange.

Royal Mail sold the site in 2003 to Merton College, which still owns the freehold. The Story Museum acquired the lease from the Carlyle Group, which had earmarked the site as part of a major retail development planned behind St Aldate’s and Queen Street.

In 2008, the Story Museum was commissioned to develop a regional strategy for child readers. It also received a Government grant to pilot a programme for parents in Blackbird Leys.

Earlier this year Tish Francis, the former director of the Oxford Playhouse, joined the Story Museum team as a co-director.