Following the announcement last week that Tweed River Art Gallery would receive $1million from the Olley estate to build the Margaret Olley Centre, the Federal Government has now promised $1million towards the project.

Tweed Shire Council and the Tweed River Art Gallery Foundation have welcomed the Federal Government announcement that it will provide $1 million towards the creation of a Margaret Olley Art Centre at the Tweed River Art Gallery in Murwillumbah.

The Mayor of Tweed, Councillor Barry Longland, said the Federal Government contribution was a valuable and greatly appreciated step towards realising a vision to establish the Margaret Olley Art Centre in the Tweed.

'I particularly acknowledge the work of our Federal Member for Richmond, Justine Elliot, who pushed hard to get these funds dedicated to the project,' Cr Longland said.

It follows an announcement this month by the Margaret Olley Art Trust that the late Australian artist had bequeathed $1 million to establish a re-creation of her studio and elements of her home and wanted it built in the Tweed, where she spent time as a child.

Council formally accepted the Margaret Olley Trust's offer last week, to establish the centre as an extension of the Murwillumbah gallery.

'Tweed River Art Gallery's (TRAG) standing as one of Australia's leading regional galleries will be further enhanced by the centre, which will include many treasured pieces by the iconic artist,' Cr Longland said.

'The Federal Government's own contribution of $1 million will go a long way towards finding the extra funds needed to complete the extension.'

The Federal funding was originally allocated for the construction of a new Tweed regional museum at Tweed Heads, through the Better Regions program.

However, planning issues have delayed the completion of development approval for the Flagstaff Hill complex and it was evident that project would not be finalised before the funding deadline.

The President of the gallery foundation, Warren Polglase, said: 'We're thrilled the Federal Government has seen fit to redirect these funds to the Margaret Olley Art Centre.

'The gallery and the broader Tweed will be thrilled to be home to a monument to one of our nation's best known and loved artists, Today's announcement takes the project a major step towards fruition.'

Councillor Longland emphasised the reallocation of funds would not have a significant impact on the upgrading of museum facilities in the Tweed.

'The extension of the Tweed River Regional Museum in Murwillumbah and the construction of a regional storage facility in South Murwillumbah, to help house the gallery collections, are funded separately and will not be affected at all,' he said.

'The Flagstaff Hill facility remains in the pipeline and will proceed once zoning issues and development approval is finalised and funds can be sourced elsewhere.'