The National Library Board (NLB) said it was aware that the name Syonan Gallery, which it picked for the newly revamped National Archives of Singapore (NAS) museum, "could evoke strong emotions".
The name of the museum, at the former Ford Factory in Upper Bukit Timah Road, had sparked debate. Some said the word "Syonan" was fraught with negative connotations.
In 1942, after the British surrender, the Japanese renamed Singapore "Syonan-to" - which means "Light of the South".
Responding to queries from The Straits Times, NLB said that after consulting historians and its advisory panel, it "decided that no other name captured the time and all that it stood for".
Elaborating on its reasoning, NLB said: "The new name of the gallery reminds us how brittle our sovereignty can be, as Singapore lost not only its freedom but also its name during the Japanese Occupation."
NLB said the museum features voices from the darkest part of Singapore's history so that "future generations will remember what our predecessors went through".
It added that about four-fifths of the exhibits are new "and presented in an immersive manner, in order to give voice to our forefathers".
The NAS also urged the public to visit the new exhibition space when it opens on Feb 16 so as to learn more about that time.
Some members of the public had strong views about the name choice.
Several called it "insensitive" and a "ridiculous name that glorifies the occupiers of the war".
But others, such as wealth manager Andrew Fong, 34, disagreed.
He said: "We simply cannot hide from what happened and it should be used to highlight the dangers of what happens when one nation enforces its superiority over others."