The Falstad Centre Foundation was established in August 2000 as a «national centre for the education and documentation of the history of imprisonment in the Second World War, humanitarian international law and human rights».
In February 2006 the Falstad Centre moved into the newly restored and rebuilt Falstad building. The restoration work was under the direction of Statsbygg. In the same year, the centre was officially inaugurated by the then Foreign Secretary of Norway Jonas Gahr Støre.
The process of developing a new permanent exhibition created lengthy and emotional debates in the media. The Falstad Centre’s plans to include all the periods of the building’s history in the exhibition, met with opposition. The main objection was that the planned exhibition contributed to the atrocities of the Nazis being portrayed as commonplace and ordinary.
Because of the opposition, the Falstad Centre chose to withdraw the original exhibition plans. In 2004 the Board decided that the permanent exhibition would cover only the period 1941–1945. In 2004-2005 there were still discussions on whether it was at all possible to convey other parts of Falstad’s history at Falstad. Folklorist Leiv Sem analysed the Falstad debate in his PhD dissertation from 2008.