President Joachim Gauck will attend the official laying of the foundation stone for the Berlin Palace, on the city's legendary leafy axis, Unter den Linden, which Prussian princes once called home.
The new building, due to be inaugurated in 2019, will house a cultural centre instead but has faced a bumpy road in its years-long planning over the site's historic significance and the price tag for a city famously known as "poor, but sexy."
At a time when many European countries are battling to rein in debt, with Germany heading the campaign for budgetary rigour, the city of Berlin has already been left red-faced by the repeatedly delayed opening of its new airport.
While the German government and hard-up city of Berlin will stump up most of the bill for the building work, almost €80 million of the total cost are being collected by German aristocrat Wilhelm von Boddien who has campaigned for years for the palace to be rebuilt.
The project has also provoked controversy because it involved pulling down
the Palace of the Republic which housed the parliament of the former communist
East Germany and a cultural and leisure centre that were cherished in the
memories of many East Germans.
The enormous building with glass and marble facades, completed in 1976 and found to be contaminated with asbestos, was demolished in 2006.
Former East German residents saw its disappearance as a further chiselling away of their identity after Germany's reunification in 1990 saw successive governments seek to erase all traces of the communist regime.
In 1999 when the German government and parliament moved from Bonn to Berlin, which again became the German capital, the then chancellor Gerhard Schröder declared himself in favour of the Palace of the Republic's destruction.
"It's so monstrous that I would prefer a palace on this site," he told Die Zeit newspaper.
Several years later, the German parliament gave the final green light for the rebuilding of the palace.
The original had been badly damaged by Allied bombing during World War Two, and its remains destroyed by the communist authorities in 1950.
The design of the replacement palace, by Italian architect Franco Stella, will see three quarters of the facades replicate those of the original Hohenzollern palace, the oldest parts of which dated from the 15th century but was mostly built at the beginning of the 18th century.
Baptised the "Humboldt Forum", the new palace will house collections from Berlin's Ethnological Museum and the Museum of Asian Art, as well as works from the scientific collections of the Humboldt University, libraries and cultural centres.
Germany has in recent years reproduced relatively faithfully several destroyed landmarks, including the Adlon Hotel in Berlin which is a replica of the famous luxury establishment that disappeared during World War II.
And in the eastern city of Dresden, an identical version of the Frauenkirche now stands, built with what was salvaged from the remains of the former church after allied bombing.