The Corcoran Gallery of Art, Washington’s oldest private art museum, and its venerable college of art and design would cease to exist as an independent institution, and its key components — artwork, historic building and school program — would be taken over by the National Gallery of Art and George Washington University, under a plan announced Wednesday.

The university would assume ownership of the landmark Beaux-Arts home of the Corcoran, near the White House, and the College of Art and Design would become part of the university. The National Gallery would take initial responsibility for the Corcoran’s 17,000 pieces of art and, after a period of study, would acquire a large fraction of them. The rest would be donated to museums around the country, with priority given to the District.

The Corcoran’s art, worth an estimated $2 billion, includes paintings by Degas and Gilbert Stuart, the famed 1770 Salon Doré, and world-class collections of photography, contemporary and American art. Although the best work would stay in Washington, one of the great 19th-century collections would be partially dismantled.

The surprise proposal — most recently, the Corcoran had been exploring a collaboration with the University of Maryland — outlines a dramatic solution to a financial emergency and an identity crisis that have plagued the beloved institution, off and on, for generations.

But the change comes not without cost of another, more emotional, kind.

Detailing the Corcoran's finances.

“There is no way to continue the Corcoran as we knew it or as we know it,” said Peggy Loar, interim director and president of the Corcoran. “That’s going to be the kernel of pain for some people.”

Still, she insisted, the Corcoran’s legacy and mission will endure in more than just name within the two partner institutions.

“What we want to make sure as stewards of the Corcoran as we know it is, we want to make sure that innovation continues. We want to make sure that education continues. And we want to make sure the building can be brought back to its original beauty,” Loar said.

That and more will come to pass, according to top officials of George Washington University and the National Gallery.

“It’s a huge gift to the nation,” said Earl A. “Rusty” Powell III, director of the National Gallery. He estimated the National Gallery could acquire more than 50 percent of the Corcoran’s collection but said it is too early to say for sure. “We’ll be able to expand our modern and contemporary exhibition program to be housed in the most beautiful galleries of any museum in the country.”

The National Gallery would exhibit modern and contemporary art in the Corcoran building under the name Corcoran Contemporary, National Gallery of Art. Works that the National Gallery adds to its collection would be credited as coming from the Corcoran Collection. And the National Gallery would maintain a Corcoran Legacy Gallery in the building, featuring works closely associated with the Corcoran’s history in its 17th Street NW building.

Admission will be free. One reason the Corcoran began slipping was the rise of government-subsidized competitors that did not have to charge visitors to help pay the bills. The National Gallery will not pay rent but will cover routine exhibition costs.

A promotional video explains the Corcoran's vibrant and active community that includes more than 600 degree students pursuing a wide range of associate's, bachelor's, and master's degrees in the visual arts. (Courtesty of the Corcoran College of Art + Design)

Meanwhile, art students will profit from mingling and studying in the same spaces as professional curators presenting powerful work, a signature facet of the Corcoran’s rare model of a combined gallery and college.

“It just gives us unparalleled opportunities to be innovative in thinking about a new model for arts education,” said GWU President Steven Knapp.

George Washington would pay nothing for the building — worth an estimated $40 million to $60 million if gutted for offices — but would be responsible for renovation costs estimated at tens of millions of dollars. The college would retain its identity within the university, although degrees would be granted by the university.

The arrangement dovetails with GWU’s expansion of its arts life, including moving the Textile Museum to the GWU campus.

“This takes all those activities to a new level of prominence, impact and influence,” Knapp said.

The bold pronouncements came with an important asterisk. The three partners have a deadline of April 7 to set the details of the collaboration. Leaders of all three institutions said they were confident the deal would be done.

Washington has heard this before. Last April, with near equal confidence, the Corcoran and the University of Maryland announced a memorandum of understanding to begin discussions on a collaboration that would save the Corcoran. The deadline on the talks was the end of the summer.

With time and operating money dwindling, gallery leaders had a critical shift of thought about the range of solutions they would consider. Until then, they had insisted that the gallery and the college remain together.

By this past December, gallery leaders were willing to contemplate separating the two. They reignited talks with George Washington and the National Gallery. There had been discussions with those two in the past, but neither had wanted to take on both the school and the gallery.

The future of Corcoran employees is not clear. GWU will assume the current one-year contracts of full-time college faculty, Loar said. The National Gallery will be consulting with gallery curators, Powell said.

Corcoran administrative departments that are duplicative might not survive the transition.

“We’re going to save as many [positions] as we can,” Loar said.

Corcoran supporters greeted the news with some sadness, but also with practical resignation and hope for the future.

“It sounds like kind of the best thing you can do in a desperate situation,” said David Levy, a former director of the Corcoran. “It’s good for the art. It will be better cared for and well displayed. But it’s the end of a very long and kind of wonderful era.”

“It seems like the Corcoran is being dissolved. . . . It’s dispiriting,” said a gallery employee who declined to be identified to protect the employee’s job.

Roy Slade, a Corcoran director in the 1970s, said he was shocked by the announcement. “I’m a little concerned about everything being split up, but I have great respect for [the National Gallery’s] Earl Powell and his stewardship of the collection,” Slade said.

“GW is a great idea, we were hoping for GW at the beginning,” said Jayme McLellan, a founder of the advocacy group Save the Corcoran. But, she added, “We’re going to lose what the collection is now. . . . The end of the Corcoran has come.”

Whenever a nonprofit organization undergoes a radical change in form or mission, it follows a legal process, in this case overseen by the District attorney general’s office, Loar said. The Corcoran has already had preliminary discussions with the office, she said. A spokesman for the attorney general declined to comment.

One of the nation’s first fine arts galleries, founded in 1869, the Corcoran expressed the passion and philanthropy of William Wilson Corcoran, a co-founder of Riggs Bank, who championed American art, along with the foreign inspirations for American art. The college was founded in about 1890 and today is one of the last examples of the once-popular 19th-century model of a museum-college hybrid. In later decades, the Corcoran’s dual mission was a source of strength — yet, increasingly, also confusion — for its fundraising and programming efforts.

GWU’s responsibility to renovate the historic building could be costly. Gallery officials estimated the price 18 months ago at $130 million. That number alone — when the Corcoran routinely has run $7 million deficits on a $32 million budget — was enough to prompt the gallery’s board of trustees to consider drastic action, including selling the historic building.

Knapp pointed out that the university would not be renovating the building as a museum, which would not cost as much. He also said he did not trust previous estimates and would rely on the university’s own building experts. The university will raise funds to cover the cost, and the Corcoran would contribute a yet-to-be determined amount from its assets. The economically struggling Corcoran has “not much” money to offer, Loar said.

At the same time, GWU would take over the Corcoran College’s building in Georgetown. Details of how the college would be integrated with the university — will students apply separately to the Corcoran program? — need to be worked out, Knapp said.

In the fall, the Corcoran college had 554 undergraduate and graduate students, down 26 percent since fall 2010. Annual undergraduate tuition and fees for the college are $31,130, according to the College Board. GWU’s comparable arts programs — including fine arts, art history and museum studies — are smaller, but overall, GWU is the largest college or university in the District, with 25,264 students as of fall, with undergraduate tuition and fees of $47,343.

The Corcoran will continue as a much smaller nonprofit organization supporting the new arrangement and pursuing the original mission set 145 years ago by William Wilson Corcoran — “dedicated to art and encouraging American genius” — Corcoran leaders said.

In voting unanimously for the plan, Loar said, the Corcoran board “had to say, okay, put public relations over here, put fear of the unknown over here, and what is the best decision we can make for everybody concerned?”

Nick Anderson, Katherine Boyle and Lonnae O’Neal Parker contributed to this report.