NEWCASTLE'S Art Gallery development will be capped at a total spending cost of $21 million, after the council voted to form a "Project Control Group" to avoid a budget blowout.
The project, which has been constantly overshadowed by financial drama, previously allocated $1.7 million to pay internal staff to oversee the project.
However, under councillor Tim Crakanthorp's latest notice of motion, the recommendation for an external group to oversee the project - similar to the Newcastle Museum and No.2 Sportsground - was adopted.
The council heard the project management would now be outsourced and likely put to tender.
Council's future city director Judy Jaeger said the process could take up to three months.
There was a public outcry when ward four councillor David Compton suggested to include all spending on the project from 2003 into the budget.
Councillor Therese Doyle described the move as "outrageous" and said it was an insult to the city to restrict the funding.
"It is a slap in the face, Cr Compton, to those who want to improve the cultural capital in the city," she said.
Cr Compton later retracted his comments.
Cr Crakanthorp reminded the council there were "significant milestones to meet" and it was decided the lord mayor would lead a delegation to the state government to appeal for the funding as soon as possible.
In December, The Star reported that ratepayers could be forced to foot an added $7 million for the Newcastle Art Gallery redevelopment if the state government decides not to financially commit.
The council also voted in December to give the state government until the end of February to pledge financial commitment.