The new, Frank Gehry-designed home of New York’s Signature Theater will be renamed for hedge-fund manager William Ackman’s Pershing Square Foundation following a $25-million gift, according to Bloomberg and The New York Times.

The off-Broadway theater will use the money to maintain $25 ticket prices for its productions for the next decade, and artistic director James Houghton pledged to keep prices “accessible” for the 10 years after that.

The new Pershing Square Signature Center opens Tuesday. The Ackman gift, the foundation’s largest to an arts group, brings to $58-million the theater’s fundraising toward a $70-million goal.

“Theater has not been my top priority,” said Mr. Ackman, the CEO of Pershing Square Capital Management, “but what I love about this is that someone can go and have a great cultural experience for $25. There are very few such examples.”