Newcastle Art Gallery Foundation chair Suzie Galwey has hailed the community and late patron Valerie Ryan for their contributions to the gallery's now-tangible expansion project.
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The Newcastle Herald reported on Friday that the NSW and federal governments had filled a $10 million funding hole in the $40 million project.
City of Newcastle will provide $16.5 million and the foundation about $12.5 million, including $10 million bequeathed by Ms Ryan when she died in 2019.
The project will start on Monday and close the gallery for two years. The expansion will double the building's size, allowing it to place more of its 7000-strong collection on permanent display.
Deputy Prime Minister Barnaby Joyce told a crowd of arts supporters, politicians and media at the gallery on Friday that the community should be lauded for its efforts in raising a significant proportion of the costs.
Standing in front of a William Dobell portrait and other works from the gallery's prized collection, Ms Galwey said the "incredible day" would not have arrived without Ms Ryan's "transformational" bequest.
"I'd also like to acknowledge that there's been community fundraising for most of the [past] 20 years, so we were already custodians to significant funds for this project," she said.
"It's a culmination of almost two decades of blood, sweat and more than a few grey hairs for all the many passionate stakeholders involved in advocacy, fundraising, planning and just generally keeping the dream alive."
City of Newcastle councillors voted last year to investigate taking a loan from NSW Treasury Corporation to fund its share of the costs rather than dip into council reserves, but it has not made a final decision on whether to pursue this option.
The council already has spent $3.5 million of its contribution on planning and design contracts.
Lord mayor Nuatali Nelmes said the expansion would establish Newcastle as "Australia's premier regional gallery" and help attract tourists.
Gallery director Lauretta Morton said the first purpose-built art gallery in regional Australia had not been modified in 44 years but its collection was 500 per cent larger than when it opened.
"Just imagine what it's going to be like when we have all of our icons out on permanent display. It's just going to be incredible," she said.
"It's time for us to grow up and be a modern, state-of-the-art institution to meet our community's expectations."
She said upgrading the gallery's loading dock would allow it to secure touring exhibitions.
The plans also include a restaurant and shop.
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