Aberdeen City Council have confirmed they will be applying to the Heritage Lottery Fund to redevelop Aberdeen Art Gallery.
The refurbishment will see the creation of a new Museums Collections Centre.
The Council will now submit the application for £10m of funding to the Heritage Grant programme.
It is estimated £33m will be required over the next four financial years, but the Council says the redevelopment will form a cornerstone of the council's City of Culture Bid 2017.
Following the completion of the Centre the art gallery will then be redeveloped.
The exact financial profile will be reported to the Budget Committee on 07 February 2013.
It is thought the Council will raise £10m through grant funding as well as corporate, philanthropic and personal support.
The outcome of the Heritage Lottery Fund application will be known in April/May 2013.
Aberdeen City Council's Chief Executive Valerie Watts said: "I am delighted that the council has taken this decision today. The investment being proposed will increase access to the city's Art and Museums Collections by a third, as well as making it possible to welcome larger incoming exhibitions.
"This work will not only benefit the people living in the city but will attract visitors from the UK and abroad. It is an important step in this council's plan to maximise Aberdeen's cultural potential as we bid to be UK City of Culture 2017."
Leader of Aberdeen City Council Councillor Barney Crockett said: "This decision highlights this council's commitment to the redevelopment of Aberdeen Art Gallery as its top cultural priority; its location is the very heart of the city's Cultural Quarter. This decision, which was unanimous, is testament to this council's determination to do all that we can for Aberdeen's bid to be UK City of Culture 2017."
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