Building costs for the extension have been estimated at £5.5m
Plans for an extension to Cheltenham Art Gallery and Museum have been approved by the town's borough council.
The new £5.5m building in the Gloucestershire town will include galleries, open access storage, study facilities and learning spaces.
Jane Lillystone, Museum and Arts Manager, said: "This is fantastic news for our Development Scheme."
A £500,000 grant from the Monument Trust was awarded to the gallery on Thursday, to help with costs.
Gary Collins, Associate Director at Architects Berman Guedes Stretton, said: "Much consultation between the design team, our client, the public and outside interest groups has helped shape the design."
Ms Lillystone, added: "In achieving this key milestone we can now move forward to the launch of the Phase II Fundraising Campaign in September.
"We have so far raised an amazing 70% of the funds needed to start construction - the remainder of which we hope to secure by spring or summer 2010.
"To complete the planning process a further decision will be required on the listed building, conservation area consent, and we hope to achieve this during August.