Aaron told WALA-TV that he didn't want the house torn down after his mother died in April.
"So this was the next best thing," he said.
Aaron started his baseball career in the Negro Leagues. He spent most of his Major League career with the Braves in Milwaukee and Atlanta and was with the team when he broke Ruth's home run record in 1974.
Hank Aaron Stadium, built in the late 1990s, is the home of the Mobile Bay Bears, an Arizona Diamondbacks farm team.
"It really does a lot for Mobile," said Mayor Sam Jones told WALA of the museum. "With the kind of character this man has shown the world - I think it shows a lot for our community."
The house is to be moved to the stadium grounds in October and the museum to open in March.