The well-preserved remains of the woman dubbed the Altai Princess were discovered in the region by a team led by a Novosibirsk archeologist in 1993 near the Mongolian border, and have been studied at the Archaeology and Ethnography Institute in Novosibirsk.
Residents of Altai, where shamanism is still widespread, had repeatedly called for the body's return to its homeland, and blamed the removal for earth tremors and other natural disasters.
However, Novosibirsk scientists had been reluctant to return the body, saying local museums did not have the necessary facilities to preserve it.
"A decision has been taken to build a sloping building for the mummy, resembling a burial mound. This will be an extension to the main building of the national museum" in Gorno-Altaysk, the museum director said.
The body will now be housed in a state-of-the-art glass temperature-controlled case. Construction work should be finished by the end of this year.
Russian state natural gas giant Gazprom has contributed about $11 million to the reconstruction of the museum, and the building of the tomb and sarcophagus, the head of the republic, Alexander Berdnikov, said earlier.
Scientists have no information on the actual history of the Altai Princess, but DNA tests and facial reconstruction have suggested she was ethnically European.
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