THE proposed multi-million dollar Margaret Olley Centre which would honour the late artist with an extension of the Tweed River Regional Art Gallery is set to get an initial green light from Tweed Shire councillors when they meet on Tuesday.

Council staff have asked councillors to accept the offer of a million dollars in funding from the Margaret Olley Trust and approve the use of another million dollars from the Federal Government.

They recommended the council accept in principle the Margaret Olley Trust's formal offer of a million dollars to establish the Margaret Olley Art Centre within a purpose-built extension to the gallery.

As well, they said councillors should endorse a move which would transfer a million dollars in Federal funding from the stalled Tweed River Regional Museum project to the Margaret Olley Art Centre, "bringing the currently available funds for the centre to $2m."

The report described the offer from the Margaret Olley Trust as "a once in a lifetime opportunity for the gallery to become the most outstanding and recognised regional art gallery in the nation with the obvious attendant benefits."

"The addition of the Margaret Olley Centre will highlight council's cultural programs, become a major tourist attraction and act as an economic driver for the region," it said.

"It is the wish of the trustees to work with the gallery director to honour the wish of the late Margaret Olley that her studio and elements of her home and collections be recreated at the Tweed River Art Gallery.

"The artist was known to support the work and programs of regional galleries, and had a particular interest in the Tweed River Art Gallery and admired the building and its collections.

"The artist also had links to the region, spending her early school days as a resident of the Tweed region."

Council staff said the offer from the trust also included a large gift of paintings from the artist's own collection "which are of significant value and national interest".

"The gift specifies that the Tweed River Art Gallery would become the repository of these works (approximately 20), a large number of works in progress ... and correspondence currently in the possession of the Margaret Olley estate," the report added.

Staff have told councillors the project would also require substantial financial assistance from the Tweed River Art Gallery Foundation Inc, the Friends of the Tweed River Art Gallery and the council.

They said the Federal Government through Richmond MP Justine Elliot had agreed to reallocate the $l million granted to council in 2007 from the Tweed River Regional Museum project to the Margaret Olley Art Centre.

Meanwhile the Tweed Heads museum project would "continue through the planning stages". However, the report said "it is more than likely that it will be several years before this project could commence".