The Titanic Story is one step closer to being told, thanks to a £500,000 development award from the Heritage Lottery Fund.

Southampton’s new visitor attraction will commemorate the 1,523 lives lost when the landmark ship hit an iceberg on 15 April 1912, with particular focus on the previously untold stories of the 549 city residents who lost their lives on board.

The main exhibition hall will depict a scene of the Titanic about to depart from the dockside at Southampton, while 4,000 artefacts rescued from the ship will be displayed in the galleries.

Southampton City Council will use the development grant to move the project forward before applying for a further £4.5m award towards construction costs.

John Hannides, cllr for culture and heritage, said: “This museum will be of international significance and could attract hundreds of thousands of visitors every year.

“Southampton was the home of the Titanic so it is only fitting that we tell our story.

“When the ship tragically sank 549 Southampton people lost their lives and hundreds of families in the city were directly affected. The impact was felt right across the world, but nowhere more so than in Southampton.

“We now need to do all we can to see how we can raise the funds to make this happen.”

The Titanic Story attraction — scheduled for completion in 2012 to mark the centenary anniversary of the disaster — will comprise phase one of a wider £28m conversion of the grade II-listed former magistrate’s courts into a museum on the city’s archaeological and maritime history.