Legendary French art dealer Yvon Lambert may – after 48 years of wheeling and dealing – have closed his Paris gallery last December, but retirement didn't mean a total exit from the art scene. 'Opening a gallery,' he admits, 'is easier than closing it.'

This month, Collection Yvon Lambert – the gallerist's Avignon museum, first opened in the 18th century Hotel Caumont in 2000 and a venture independent from his commercial gallery's stable of artists – reopens after two years of renovation, with double the space and the addition of the dealer's private contemporary collection of videos, photographs, paintings and sculptures now on public view.

The reopening unveils the extension into the neighbouring Hotel Montfaucon, which has been transformed by French architecture firm Berger & Berger into a classic white cube gallery. The new space will house a permanent collection comprised of contemporary works owned by Lambert and donated to the French state in 2012. His donation of 556 masterpieces is considered the most important gift of art since a 1906 bequeathment to the Louvre that included works by Monet, Manet, Renoir and Delacroix.

As a champion of contemporary art in France, Lambert helped usher in a broader global vision in a country where historians had long been reluctant to admit that Paris was no longer the centre of the art world. The only contemporary space of its kind in Avignon, the collection features works from almost half a century's worth of collecting, from Lambert's early years of activity in the 1960s through to the early 2000s; artists include Carl Andre, Jenny Holzer, Donald Judd, Idris Khan, Bertrand Lavier, Agnes Martin, Robert Ryman and Cy Twombly, among many others. The first 250-piece rotation of his collection, Lambert explains, will be a selection of conceptual works that 'talk about the spirit of family'.

The inaugural temporary exhibition, 'An Imaginary Museum' at Hotel Caumont, pays homage to Patrice Chéreau, the influential theatre, film and opera director – and Lambert's friend – who died in 2013. An Avignon tribute to the French national icon is particularly fitting given the town's annual summer theatre festival.

Personal correspondence, original detailed sketches of costume and sets, and stage models for some of Chéreau's best-known productions are surrounded by pieces related to the obsessions that animated his life's work. Contemporary and classic clash with stark photographs by Nan Goldin, themselves juxtaposed with the sumptuous romance of Delacroix's paintings; in a shadowy portrait, performance artist Marina Abramović sits atop a pile of bloody bones near a clip of Chéreau's acclaimed 1994 film La Reine Margot.

After descending into the dark, sometimes terrifying world of Chéreau, the shock of leaving the dim Hotel Caumont and crossing the newly built corridor into the bright, minimalist permanent collection is like soaring into a new dimension.

Collection director Eric Mézil said the museum plans to mount two temporary exhibitions a year; the next show will feature more than 200 Andres Serrano pieces from Lambert's archive, generally considered to be the most important collection of the photographer's work.