The Moscow-based Violin Art Foundation bought the rare violin - the first from Paganini's legendary collection to come up for auction - for 568,000 pounds ($1.01 million) on Tuesday, auctioneers Sotheby's said in London.
Maxim Viktorov, chairman of the foundation's board of trustees, said winners of its annual Paganini Moscow International Violin Competition "will be given the rare opportunity to play this extraordinary violin for one year".
Not only was it the first time one of Paganini's cherished instruments had come up for auction, it was one of only 50 surviving violins by master craftsman Carlo Bergonzi of Cremona. The price set a world auction record for a Bergonzi.
The violin dates from about 1720 when Bergonzi was in his late 30s and already a powerful name in his own right, ranking third behind the towering Cremonese makers Josef Guarneri and Antonio Stradivari.
Deal with the devil
It is not known when Paganini - whose virtuoso playing made people think he had struck a deal with the devil - acquired the instrument.
But it is known to have been among the 20 violins, including 10 Stradivaris, passed to his son Achille on Paganini's death in 1840 and certified as a Bergonzi in 1870 by French dealer and violin-maker Jean-Baptiste Vuillaume.
It changed hands several times over the ensuing 80 years before ending up with John Corrigliano, who was concert master of the New York Philharmonic orchestra from 1943 to 1966.
In 1957, he sold it to an amateur violinist whose daughter offered it for sale on Tuesday.
Earlier this year, a Stradivarius violin dated to 1699 and known as the Lady Tennant was auctioned for $2.03 million. Christie's said it was the highest price paid at auction for a musical