DEVELOPMENT of the existing Newcastle Art Gallery has officially kicked off, after the Project Steering Group held its first meeting last week.
The group discussed the building's design and keeping the project within its budget restrictions.
The Newcastle Art Gallery project has been plagued by ongoing controversy, after initial plans for a $25 million project were scrapped last year.
It is expected the new design, at $21 million, will not include many promised features such as a 117-seat theatre, a gallery board room, shops along Darby Street and upgraded offices.
Other elements, including a cafe and gallery shop, will be reduced in size.
The $21 million will be funded equally by Newcastle City Council and the federal and state governments.
However, the council is still waiting on the $7 million financial commitment from the state government.
Should the O'Farrell government choose not to back the project, Newcastle ratepayers will be left to foot the remaining $7 million.