A new museum dedicated to the history of Chinese people in Australia will open soon in the heart of Sydney, exploring and preserving the two countries' centuries-old shared past.

Plans for the Museum of Chinese in Australia (MOCA) were highlighted by City of Sydney officials on Monday, coinciding with International Museum Day.

"The museum will play an important role in promoting and sharing the story of Chinese settlers and their descendants, as well as understanding and celebrating their challenges, contributions and achievements," Sydney Lord Mayor Clover Moore said.

It will occupy a Victorian-era three-story sandstone building on the edge of the city's Chinatown in Haymarket, recently vacated by the suburb's library.

"Haymarket is the home of our city's oldest and largest Chinatown, so it's fitting that this is where we will create a centre for the preservation of our Chinese history," Moore said.

MOCA will feature rotating exhibitions, a collection of historic reference materials including books and journals, community spaces for meetings and events and a studio area for artistic programs.

There will also be an attached cafe and shop featuring Chinese-Australian inspired baked goods.