Work will start on the museum - to be called the "Museum of the July 15 Martyrs and Democracy" - from June and it will open its doors to visitors at the end of 2018, the state-run Anadolu news agency said.
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It will be built on a 10,000 square metre area in Kahramankazan outside Ankara with a modern cuboid design, it said.
There will be permanent, temporary and interactive exhibits on the "martyrs and warriors" of July 15 while other facilities will include a library, cafe and a gift shop, it said.
The coup erupted on the night of July 15 when disgruntled army officers launched a botched attempt to remove Erdogan, bombing Ankara from war planes and opening fire around Istanbul's main bridges.
The coup was put down when thousands of Erdogan supporters surged into the streets in his support and the Turkish authorities see its defeat as a triumph of democracy.
The official narrative has since become a cornerstone of modern Turkish history and referred to by Erdogan at every rally ahead of the April 16 referendum on expanding his powers.
Erdogan blamed the coup on his arch enemy, the US-based preacher Fethullah Gulen, but he has denied the charges.
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The leader of the main opposition Republican People's Party (CHP), Kemal Kilicdaroglu, last week angered Erdogan by claiming that the failed putsch was a "controlled coup" that the authorities knew about in advance.
Erdogan retorted that such comments were an insult to the 249 "martyrs" killed in the coup.
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