The first and only national museum celebrating American writers has announced it will open in the “most American of American cities” after signing a 10-year lease in the centre of Chicago.

The American Writers Museum will officially start calling the midwestern city home in early 2017. The opening will follow five years of planning, fundraising and searching for a space that could host interactive exhibits, educational programs and themed galleries celebrating America’s most influential writers.

Situated on Michigan Avenue, the museum will neighbour institutions including the Chicago Cultural Center and the Arts Institute of Chicago. The latter was recently named the top museum in the world by TripAdvisor.

“An institution that celebrates the written word is certainly one I want to celebrate,” Toni Periwinkle, president of the Cook County Board, said on Tuesday morning. “It’s especially significant that this institution is located in Chicago, the home over decades for so many great writers.”

At an official announcement ceremony held at the Chicago Cultural Center, an array of public officials, donors and museum leadership spoke about Chicago’s most important literary figures, including author Richard Wright and poets Gwendolyn Brooks and Carl Sandburg.

“I am absolutely thrilled to be here today for this milestone occasion,” said Michelle Boone, commissioner of cultural affairs and special events. “The American Writers Museum will be a wonderful addition to the city’s cultural landscape that will bring many, many visitors to Chicago.”

The museum expects over 120,000 people to visit annually, putting it on par with other museums of similar size in the city including the National Museum of Mexican Art (131,000 in 2014) and the Illinois Holocaust museum (100,000 in 2014).

The museum will focus on using new media and technology in exhibitions, not only to differentiate it from a library, but also to engage in contemporary forms of writing from social media to digital journalism.

“The writers in the museum will be constantly be changing,” said Ronne Hartfield, board member of AWM and essayist. “[T]he range of writing will include playwrights and poets and journalists and screenwriters.”

To aid in this, the AWM has created a network of 51 affiliate organisations around the country with whom they will be working on programming and “author-specific knowledge” as the museum develops. These affiliates will also help facility public events.

The Poetry Foundation is one of the affiliates and is, said its media director Elizabeth Burke-Dain, “committed to a vigorous presence for poetry in our culture”.

“As an organization that works to raise poetry to a more visible and influential position, the American Writers Museum will be an important complement in our efforts to make the public more aware of contemporary and classic American poets and poetry,” Burke-Dain said.

Construction is due to begin on the new museum in the coming months, but the leadership and board must raise $5m before the end of 2016 in order for the museum to open the following year – a timetable they believe is possible.

Meanwhile, supporters described the decision to locate the museum in Chicago as essentially patriotic.

“The opening of the American Writers Museum in the spring of 2017 will add to the luster of our world class museums, research libraries, galleries and live performance venues,” said alderman Edward Burke.

“It is just one more example of why Chicago is the most American of American cities.”