The museum, founded in 1827, will mark its bicentenary next year, and chief executive Kim McKay said the display would be a centrepiece of the milestone.
Because local laws prevent the whole skeleton from leaving Patagonia, the museum will receive a moulded cast of the dinosaur, along with an original fossil thigh bone, which McKay said was the largest dinosaur fossil bone ever found.
"It will take up the entire length, virtually, of our touring exhibition hall down in the basement," McKay said. "I had never seen anything as big, and I've always been a bit of a dinosaur fanatic."
McKay said the animal was estimated to have weighed an extraordinary 70 tonnes when it had its flesh on it. She noted that recent finds had turned up only small fragments of bone that could point to an even larger species, "but at the moment, this is definitely the world's biggest [dinosaur]".
Patagotitan mayorum roamed Argentina's Patagonia during the Cretaceous period, about 100 million years ago. The exhibition is one of several milestones for long-lived Sydney institutions: only a handful born in the city have reached 200 years, including Australia Post, the NSW Supreme Court, Westpac Bank and the Royal Botanic Garden Sydney.