For some it is the largest and most democratic art movement the world has ever seen, for others it is unwanted visual pollution. But street art now has a permanent claim on the art world: an entire museum dedicated to the genre.

Urban Nation in Berlin is the world’s first major institution built to champion and archive street art and graffiti, which fully emerged in New York in the 1970s with artists who would tag the subway tunnels. Since then it has grown into a global movement, with artists making works – mostly illegally – on cityscapes around the world.

Its opening show has new works by over 100 of the most famous street artists working today, from Shepard Fairey (the artist behind the Obama Hope poster) to 3D (the frontman of Massive Attack), Ron English and Blek le Rat, the Parisian street artist who is seen as the pioneer of stencil street graffiti.

The museum has also been given outside wall space in Berlin, and taken over the nearby metro station with a giant window illustration. While street art and graffiti shows have been the subject of numerous exhibitions over the past five years, it is the biggest acknowledgment so far of urban art as a legitimate art form, with an enormous fanbase worldwide.

Blek le Rat, 66, who studied at the prestigious École des Beaux-Arts in Paris but made his name spraying graffiti rats on the streets of Paris in the 1980s, said he was thrilled that an institution was validating his life’s work. He described the street art movement as “the most important in the history of art, because when you count the number of pieces being made across the world every day, count the number of artists, it is absolutely huge”.

Inside the museum. Photograph: Markus Schreiber/AP

“I think this museum is a turning point,” he added. “It was a goal for us to be admitted into the institutions. It’s very tricky because on one side we are rebellious, we make art in places where it is illegal, we risk jail by making our art on the streets, but on the other side, when you talk with street artists and graffiti artists they all want to be in museums, they all want to be sold at Christie’s, they want to be a part of the art world.”

There are certainly questions about whether the museum marks the institutionalisation of an art movement valued for its anarchic spirit, where works are mainly painted at the dead of night, dodging the prying eyes of police and angry landlords. All the works in the museum’s opening show were created specifically for the gallery space, with some sculptures but mainly canvases.

The museum’s director, Yasha Young, said the works were just an “extension of what happens on the streets”, and that they would never “chop off” work that had been made outside and put it in on display. “The art in here is not street art and it is important to show that these street artists do also work on canvas,” she said. She rejected the idea that bringing urban art into a museum space muted its impact.

English, one of the best-known street artists working today, said the museum would also help artists become more appealing to collectors and galleries who liked street art but were afraid it would not have value in the market.

“I’m definitely part of history but maybe not part of the art world,” he said. “Most people think when I’m dead I’m going to be huge, bigger than [Jean-Michel] Basquiat. I’ve had some of the biggest collectors in the world tell me they adore my art and the second I go blue chip, that’s all they will invest in, but they won’t buy it till then.

“Street art has to hit the museum circuit to go up in value. The big money hasn’t come in yet, but I think this museum might change that, so it will be interesting to see how the culture responds.”

For Young, who has spent the past decade getting Urban Nation off the ground, the museum was about helping people understand the street art movement as not just a “passing fad” but something credible, international and artistically important. It also features a library of books, rare zines and ephemera collected by photographer Martha Cooper, who has been documenting the movement for four decades.

Artist David de la Mano works on a painting on a building near the museum. Photograph: Carsten Koall/EPA

The increasing commercialisation of street art, and its appropriation by advertising, brands and even property developers who commission murals to help gentrify an area and drive up house prices, is an issue for the movement worldwide. Whereas street art used to be viewed as an eyesore, detested by city authorities, works by Banksy now fetch upwards of a million pounds, and buildings with street art on them are fought over by councils and private corporations.

Urban Nation is not the first time that street art has been brought into institutions. Graffiti artists were embraced wholeheartedly by the New York art world in the 1980s and welcomed into galleries but the tide turned quickly, with an article in the Village Voice headlined “RIP Graffiti”. Most graffiti artists never got gallery shows again.

Young admitted she worried for the current direction of the movement and that a key purpose of the museum was “to give street art some more grounding and integrity before it becomes a little thing that was swallowed up by advertising”.

Blek le Rat agreed that street artists were still grappling with how to handle the acceptance of institutions and commercial organisations without being accused of selling out. “I know there is a problem here,” he said. “The market and the pull of institutions is very strong. We need something to protect the original spirit of street art but also we need a memory of what happens in the streets for future generations. So we will see in the future how this museum changes things.”