From wartime Sheffield to yesterday's packed, triumphant, press conference at the Scottish National Gallery of Modern Art was a long and winding road for Anthony d'Offay.

But for Mr d'Offay, 68, who for more than 40 years has been one of the pivotal figures on the international arts scene, it was more than apt that it was in Edinburgh that he announced the part sale, part donation of his extraordinary private collection of contemporary art to the nation.

It was in Edinburgh that, as a student at its university, he was bewitched by the masterpieces of the National Gallery on The Mound, and began his lifetime love affair with visual art.

Born in Sheffield in 1940, Mr d'Offay said viewing the paintings in Scotland's capital was "the defining experience of my life".

He said his key text books in his student days were the "the collections of the National Galleries of Scotland" and added: "I love Scotland in every way. Edinburgh and Glasgow, Scottish places and Scottish people. It is a place that you can feel particularly part of, and attached to."

It was at Edinburgh University too, that Mr d'Offay began the career that was to bring him so much fortune: the buying and selling of art.

As a student, he bought the books and papers of two obscure fin de siecle poets which, having spent one summer holiday meticulously cataloguing, he then sold at a handsome profit. Now, many years later, he has passed on his studiously collected art collection to Scotland and the UK - a collection that Nicolas Serota, the director of the director of the Tate, said was the most important private collection in the UK, and among the top 20 in the world.

At the height of his business, it was said his company turned over £30m a year, and the list of artists he befriended, worked with, and collected reads like a Who's Who of contemporary art since the war - the English abstract artists and Vorticists such as Wyndham Lewis and Stanley Spencer, and later, major names such as Lucian Freud, Joseph Beuys, Mark Rothko, Andy Warhol, Jeff Koons, Gilbert and George, Roy Lichtenstein, Carl Andre, and Jasper Johns among many others.

But although he made his name in London, Mr d'Offay's love of Scotland is not feigned, it is genuine: he has a home in the Highlands with his wife and business partner, Anne, and says Edinburgh is the "second city of Britain".

Mr d'Offay added: "Edinburgh is the only city outside London that has those collections of old Masters, the great Impressionists, the great Surrealists in its galleries: it always seemed the obvious place that I would want to talk to. It was the first place in the world that I thought of, starting probably when I closed my gallery to commercial business in 2001. It just always seemed right.

"And through all this time of negotiation, I never felt that this was not going to happen. There is always going to be difficulties with this kind of negotiation, but we managed to do it."

He added: "The most important thing I care about, is being able to give these works to young people. If you can encounter art at a young age, that is such a wonderful gift.

"It's so important for teenagers, in particular, to see the art of their own time, that is most important because when young people see that art, they can start to ask important questions."

It was after the abrupt closure of his commercial gallery - which surprised many in the art world - that he began talking to the National Galleries of Scotland about how he could get his private collection into the public domain.

Initially he spoke to Richard Calvocoressi, the then-director of the Scottish National Gallery of Modern Art, and Keith Hartley, its deputy director, in 2003/2004.

Subsequent exhibitions at the NGS, including the successful Ron Mueck and Andy Warhol shows, featured a number of his loaned works and maintained the putative deal's at times faltering momentum.

There were twists and turns in the negotiations: although Mr d'Offay never wanted to receive the full worth of his collection - more than £100m, according to both Christie's and Sotherby's - the £26.5m needed to recompense him for the original cost of the works was a tall order for the then-Scottish Executive, and way beyond the limited coffers of the NGS. There was also talk of needing to house the full collection in a new building, with the adaptation of a modern premises in Leith mentioned. That has fallen by the wayside, although Brian Ivory, chairman of the NGS, admitted they do need a new building dedicated to modern art.

However, in 2006, the NGS invited the Tate, in London, to become partners in the deal, and with money levered in from the Department of Culture, Media and Sport, the National Heritage Memorial Fund and the Art Fund, yesterday's announcement was made possible. The DCMS also arranged the transfer of funds between departments in London, which meant the collector was not hit with a huge tax bill as a reward for his generosity.

Married since 1977 to Anne Seymour, a curator for many years at the Tate, yesterday Mr d'Offay said that the deal to give the more than 700 works of his "Artist Rooms" collection to the nation would not have happened without her and Marie-Louise Laband, the long time director of his gallery.

But most people in the room knew that the key to the National Gallery of Scotland's extraordinary acquisition was one man: the quietly spoken gentlemen in the blue sweatshirt, blinking amid camera flashes and TV cameras - a former student returning to the NGS the gift he had once received from it: a miraculous store, hundreds-strong, of world-famous, inspirational art.

The works

Artist Rooms - the Anthony d'Offay collection, part sold, part gifted to Britain yesterday, includes: 725 works, collected over a period of more than 30 years.

It is arranged in "rooms" - 50 rooms by 25 artists, and a further 10 works by seven artists.

The collection has been conservatively valued, by both Christie's and Sotherby's, as being worth at least £125m.

It includes 69 black and white photographs by Diane Arbus, the pioneering photographer.

136 works by Joseph Beuys, one of the most influential artists of the 20th century.

Two rooms of art by Gilbert and George, comprising nine works.

The Sailing Dinghy by Ian Hamilton Finlay, from 1996.

Five works by Damien Hirst, including the sheep in formaldehyde, Away from the Flock.

17 works by Jeff Koons, one of the leading American contemporary artists.

Three rooms of work by Robert Mapplethorpe, including 64 black and white photographs.

Three sculptures by Ron Mueck, and two works by Bill Viola, the pioneer of video art.

232 works by Andy Warhol.