THE federal government said a $7 million grant for the redevelopment of Newcastle Art Gallery would need to be "reviewed" should the city decide to shift the project to the derelict post office building.
The statement followed an announcement from Newcastle lord mayor Jeff McCloy, who wants to see the heritage post office converted into a gallery.
The Department of Regional Australia, Local Government, Arts and Sport said the grant was provided for the redevelopment of the Laman Street site.