The funding from the HLF is the largest single investment ever seen at Beamish and will help drive the major £18m ‘Remaking Beamish’ project.
The centrepiece of the project will be a reconstructed 1950s Town – meaning that, Beamish will once again include a period within living memory.
Plans include a fully operational cinema moved brick by brick from Sunderland, as well as examples of shops and housing from across the North East region.
The home and studio of Spennymoor artist Norman Cornish will also be replicated and a block of Aged Miners’ Homes will be copied to create a pioneering centre for older people, including those living with dementia.
Richard Evans, Beamish’s director, said: "This is just incredible news – and I am so proud of everyone at Beamish who has worked so hard to achieve this amazing success.
"We’d like to thank the Heritage Lottery Fund and all of the National Lottery players who have made this possible.
"The project is the result of years of careful planning – with staff and volunteers working alongside people from across the North East so we can tell their story.
"We couldn’t do this without the help and support of local people – and are so grateful for the donations we have received of buildings, objects and stories.
"I hope people from all across the country will enjoy seeing the new exhibits being created in the museum over the next four years.
"These are exciting times for everyone who cares for Beamish – our visitors, supporters, staff and volunteers.
"This is the most ambitious project we’ve ever undertaken – building on our successful growth in recent years – so we can all achieve even more in the future."
The impact of the project is expected to be significant. Nearly 100 new jobs will be created alongside more than a thousand training opportunities – including 50 apprenticeships.
Beamish already attracts nearly 700,000 visitors every year and by 2020 this number is expected to grow further, with 100,000 more tourists attracted to the region.