The bonus level is located in Borgin and Burke's in Diagon Alley. It is located at the top of the stairs in the main room, away from the entrance. To activate it, you must build the bouncing blocks that become available after you have completed all levels of the main story.
To complete the bonus level, you need to collect 1,000,000 studs in the level. Bonus multipliers do not count here.
Side note: you get a gold brick for completing this, allowing you to get 201/200 gold bricks in this game.