A museum stripped of public funding after selling an Egyptian statue in its permanent collection to a private buyer for £15m (US$18.7m, €17.7m) is now using that money for an extensive refurbishment and expansion of its facilities.

Northampton Museum, which lost its Arts Council England (ACE) accreditation status in August 2014 as a result of selling the 4,500-year-old Sekhemka sculpture, started work on 19 February, putting its collection into storage ahead of an internal strip-out.

The museum will receive a sizeable extension between the former Gaol Block and Guildhall Road sections of County Hall, which houses the attraction.

The extension comes at a cost of £8m (US$10m, €9.5m), with work expecting to take around two years to complete. Heritage-building specialist Purcell will lead the redevelopment, which will include additional gallery areas, a new entrance exhibition space, an education suite and new shops.

Once complete, the first phase of development will provide more space for the museum’s permanent collection and will also allow the hosting of major touring exhibitions.

“At a time when other museums are closing down or cutting back, we are making a huge investment in ours, which will help boost its fortunes and protect it for the future,” said councillor Anna King of Northampton Borough Council.

“During the extension and renovation, we will be running an appeal to expand and enhance the collection, and we have already been approached with donations linked directly with Northampton’s heritage.

“When the museum reopens in Q3 2018, visitors will be welcomed into a stunning new environment fitting for the wealth of fantastic exhibits we either own or have access to.”

During the renovation there will be pop-ups and school events, but most of the school activities, along with some of the museum’s general activities, will be transferred temporarily to Abington Park Museum.