The money will be used to create a permanent home for the museum's 10,000 Islamic art pieces and help foster greater understanding about the contribution of Islamic civilisation to Western culture, the office said on Wednesday.
The new wing of Louvre that will house the museum's collection of Islamic art would be designed to evoke an "iridescent cloud" and a "flying carpet", the architects said later on Wednesday at a news conference announcing the project.
The two-story structure, one at ground level, the other just below, is the first major architectural addition to France's famous national museum since 1989. That year, Chinese-born American architect IM Pei's bold glass and steel pyramid triggered sharp controversy as an ultra-modern intrusion into the hallowed Louvre grounds but has since gained acceptance.
Heart of the Louvre
The Islamic art wing is due to be completed in 2009 and will cost $67.3 million - $20 million of which has been donated by bin Talal.
It will be inside the Cour Visconti, one of two enclosed courtyards on the side of the Louvre closest to the Seine River and the only available "piece of real estate in the Louvre situated in the heart of the museum and in its most frequented area", said museum president Henri Loyrette.
The semi-independent structure will be covered by a roof composed of a "veil of glass discs that will refract light", said one of the two principal architects, Italian Mario Bellini.
He likened the structure to "an iridescent floating cloud". Bin Talal, one of the richest men in the world, said it reminded him of a "flying carpet".
Inside, 4000 square meters of floor space spread over the two floors will accommodate a 10,000-piece collection of Islamic art that rivals those of the British Museum in London and the Metropolitan Museum in New York but that has rarely been seen for lack of display space.
Saudi Prince Alwaleed bin Talal is
one of the world's richest men
A separate collection of rare tapestries and tissues, in mothballs for two decades, will also be relocated from their current home at the Museum of Decorative Arts, also in Paris.
Bellini, best known for his furniture design and his work on the National Gallery of Victoria in Melbourne, along with his collaborator Frenchman Rudy Ricciotti, prevailed over six other finalists who also bid for the project.
The winning design was the only one that left the 17th and 19th century facades of the courtyard exposed and that could house the Islamic art without disturbing any existing collections.