To create the canopy, architectural design practice Jenny Sabin Studio chose to use recycled photo-luminescent textiles that collect solar energy and produce light.
It glows in hues of blue, pink and purple at night time, and exhibits more subtle changes during the day.
"With innovative construction and design processes borne from a critical merging of technology and nature to precise attention to detail at every scale, Lumen will no doubt engage visitors from day to night in a series of graduated environments and experiences," said MoMA associate curator Sean Anderson.
Two cellular fabric canopies stretch across the courtyard, formed from over a million yards of digitally knitted and robotically woven fibre.
Some of its holes are left open, while other portions droop down to form 250 fabric tubes, which hang underneath the canopy like stalactites with frills at the bottom that visitors can touch and play with.
Other features include an integrated misting system, which sprays water when visitors are near to cool them down during the hot summer weather.
"Held in tension within the walls of MoMA PS1's courtyard, Lumen turns visitors into participants who interact through its responsiveness to temperature, sunlight, and movement," said MoMA PS1 director Klaus Biesenbach.
Three private seating areas are made where tall black poles pierce through the surface of the web-like structure, with the large holes supported by circular frames.
The openings are wrapped in tensile rope that extends in diagonals from the top of the pole to the floor.
One hundred recycled wooden spool stools furnish the inside, and are also wrapped in robotically woven fabrics.
Jenny Sabin Studio is based in Ithaca, New York, and works on projects across a range of disciplines, including architecture, biology and mathematics.
It was selected as this year's YAP winner ahead of Los Angeles-based Bureau Spectacular; Chicago-baseed Ania Jaworska, Office of III, which has studios in New York and San Francisco; and SCHAUM/SHIEH from Houston.
Lumen will open in the courtyard of MoMA PS1 in Long Island City on 29 June 2017, alongside an exhibition of projects from runners up in the competition.
Now in its 18th edition, the annual YAP for emerging architects is organised by MoMA PS1 with the Architecture and Design Department at MoMA.
Previous installations have included a web of brightly hued rope, and a cluster of circular towers built from bricks grown from corn stalks and mushrooms.
Photography is by Pablo Enriquez.