Arts organisations in England are to get extra £50m from the government.
The Victoria and Albert Museum's education centre is to get a boost
The Arts Council England will receive the extra cash by 2011, when its annual budget will be £467m, Culture Secretary James Purnell has announced.
Arts Council England chief executive Peter Hewitt said it was "fantastic news" for the arts.
Mr Purnell also revealed more funding for England's national museums and galleries, guaranteeing free admission for a further three years.
Grant aid to these institutions will increase slightly above inflation from £302m this year to £332m in 2010/11, Mr Purnell said.
The announcement follows this year's spending review, in which Chancellor Alistair Darling set out the government's spending plans for the next three years.
Mr Purnell said: "The spending review settlement is an excellent deal for arts, museums and galleries in this country, with real terms rises across the sector, plus additional investment through the Arts Council.
"The extra £50m that the Arts Council will receive by 2010/11 will ensure that artists, performers and companies get the chance to continue producing world-class work for growing audiences."
Mr Hewitt welcomed the funds, saying: "It's a recognition of the work of our artists and arts organisations whose energy and imagination have made our cultural life genuinely the envy of the world.
"The Arts Council priorities for excellence and innovation in the arts can now be made real in exciting and inspiring ways."
Some of the cash will be used for the Cultural Olympiad, four years of cultural activity designed to celebrate the Olympic spirit before the London 2012 Games.
There will also be extra funding for special projects, including the new Museum of Liverpool development and the Victoria and Albert Museum's new Sackler Centre for Arts Education.
The Museum of London will also get extra cash, as will the Natural History Museum's Darwin Centre, which contains an insect and plants collection.
Natural History Museum director Dr Michael Dixon said: "[We are] delighted with the additional government financial support in recognition of the importance of the second phase of the Darwin Centre."
It was "the most significant development that the Museum has undertaken since it moved to its present site in South Kensington in 1881", he added.
Michael Lynch, chief executive of the Southbank Centre, said the funding announcement was "great news".
"Hopefully [this] means we can continue to go from strength to strength, enabling us to build on the great progress we have made over the past few years," he said.