After being forced to abandon plans in Chicago, Beijing studio MAD developed two competing designs for the Star Wars creator's film museum, each in different US cities.
But museum's board has revealed it will move forward with the proposal in Los Angeles, where it is expected to better benefit the surrounding residential community.
The $400 million attraction will be built in Exposition Park, near the Natural History Museum and Coliseum.
"South Los Angeles’s Promise Zone best positions the museum to have the greatest impact on the broader community, fulfilling our goal of inspiring, engaging and educating a broad and diverse visitorship," said the board.
"Exposition Park is a magnet for the region and accessible from all parts of the city," they continued.
"As a museum uniquely focused on narrative art, we look forward to becoming part of a dynamic museum community, surrounded by more than 100 elementary and high schools, one of the country's leading universities, as well as three other world-class museums."
MAD principal Ma Yansong envisioned the building as a sinuous volume, with tapered edges that lift the galleries off the ground, allowing space for pedestrians to walk underneath.
Inside, the museum will contain around 100,000 square feet of galleries, which equates to approximately 9,000 square metres.
Public spaces will be created on the building's roof, in the form of plant- and tree-covered terraces, while an underground car park with accommodate approximately 1,800 vehicles.
The museum board claims the building will become "one of the most imaginative and inclusive art museums in the world". With Lucas expected to pump $1 billion into the project, it is anticipated to create thousands of new jobs for the city.
Local politicians have spoken out in support, including mayor Eric Garcetti, who said he used "everything we have" to secure the project.
He claims the content of the museum – George Lucas' private collection, including art and memorabilia from the Star Wars and Indiana Jones movies – carries "so much meaning in the history and legacy of Los Angeles".
"LA is gaining a new jewel with the breathtaking Lucas Museum of Narrative Art – and its presence here means that a day at Exposition Park will soon bring unrivalled opportunities," he said.
He described his vision for a park where visitors can "be immersed in stories told on canvas and celluloid, be moved by the richness of African-American history and expression, be awed by the wonders of science and the natural world, take a journey to the world of space exploration, and sit in the stands for a world-class sporting event".
MAD first unveiled its design for the Lucas Museum in late 2014, when it was working with Chicago-based Studio Gang.
Ma – whose best-known projects include the huge Harbin Opera House in China and the curvaceous Absolute Towers in Canada – said at the time that he wanted to make the museum building appear like a "wave" coming out of the ground.
The design proved controversial. Chicago alderman Bob Fioretti described is as "a palace for Jabba the Hut", while local group The Friends of the Parks filed a lawsuit claiming that the site was still a protected waterway.
MAD responded by producing a slimmed-down design, while Chicago mayor Rahm Emanuel suggested a new location, in a bid to keep the project in Illinois. But in the end, Lucas decided to move the proposal to California.
It becomes the latest in a series of new museums in Los Angeles, which has become "the hottest destination" in the USA for architecture, according to American architects.
Diller Scofidio + Renfro's The Broad art museum opened in the city in 2015, followed by the revamped Petersen Automotive Museum, while Peter Zumthor is working on the new Los Angeles County Museum of Art.