TWEED Shire Council looks set to push ahead with the third stage of the Tweed River Art Gallery, to be known as the Margaret Olley Centre, after Federal MP for Richmond Justine Elliot yesterday announced a further million dollars in funding.

The announcement followed more than a week of intense work by Ms Elliot including urgent talks with Prime Minister Julia Gillard and Arts Ministers Simon Crean.

The extra funding comes just ten days after it was revealed that the Margaret Hannah Olley Art Trust, set up after the death of the famous artist, provided an initial million dollars toward an extension to the gallery in the much-loved late-artist's name.

Yesterday Ms Elliot revealed she immediately started working to get the federal funding after the council asked her for help in making an immediate move on expanding the gallery.

She revealed that because the council was not in a position to proceed with a million dollars in promised funding for a new Tweed heads museum she had sought the urgent talks to see if the funds could be made available for the gallery.

"I spoke to Simon Crean the Minister for Arts and the prime minister," Ms Elliot said.

She agreed when asked that the funding was "proof" she was working hard despite fierce criticism in recent days that she had only spoken 18 times in parliament in the past year.

Speaking at the art gallery on the outskirts of Murwillumbah Ms Elliot said she was "delighted to announce today that after putting up a strong case for reallocation of these funds" $1million would be provided by the federal government to construct the purpose-built Margaret Olley Centre.

The centre, effectively the third stage of the art gallery, would include a recreation of Margaret Olley's studio and elements of her home and collection.

Ms Elliot was joined at the announcement by former deputy Prime Minister Doug Anthony, who donated the land for the gallery, Tweed Mayor Barry Longland, Cr Warren Polglase, gallery director Susi Muddiman and Friends of the Gallery president Lyn Stewart.

Cr Longland enthusiastically welcomed the announcement.

"It's great news," he said.

"Receiving the gift from the trust was a wonderful incentive for us to move ahead with stage three.

"This federal government money is going to make it a reality, together with money that may be available from the Friends (of the Gallery)."

Mr Crean in a statement on the funding said Ms Olley spent time in the Tweed as a child and opened a new wing of the Gallery in 2006.

"With the recreation of her studio, elements of her home in Paddington and part of her invaluable collection in a new wing in the Gallery, we will get a precious insight into the life of one of this country's most acclaimed and beloved artists," he said.

"This is an exciting opportunity for the Tweed region. The Margaret Olley Centre will hold works of significant national value and elevate the Tweed River Art Gallery from an already leading regional gallery to one of the most recognised regional art galleries in the nation."

Ms Elliot described the establishment of the Margaret Olley Centre as a boost for the region.

"I've no doubt that with the splendor of Margaret Olley's works on display the Tweed River Art Gallery will become a major tourist attraction for the community," Ms Elliot said.