The project, which would involve adding a new three-storey building to the rear of the art gallery, has been on the drawing board since a conservation report in 1997 on the redevelopment of the 1884 R.A.Lawson-designed former bank building.
The Waitaki District Council's community services committee yesterday took the first step by recommending the council use endowment fund money to commission McCoy and Wixon Architects Ltd to prepare working drawings and an itemised costing of the project.
It also recommended a Forrester Gallery redevelopment sub-committee be established to oversee and raise funds for the project.
The council will make final decisions, and name the sub-committee, on June 30.
The key to the project will be raising more than $4 million from outside funding sources - other than ratepayers - through grants and donations.
The council has used $700,000 from reserve funds for the project.
Architect John McCoy said the new, modern-style three-storey building with mezzanine floor could cost about $4.8 million, excluding GST.
The concept for the new building, supported by the New Zealand Historic Places Trust, was it should be clearly distinguishable from Lawson's original design.
That has resulted in a plan for modern building, utilising Oamaru stone on the basement similar in design to the existing building and wooden window and door joinery with dark, grey-coloured zinc cladding on the rest.
It would address issues associated with the existing building, including providing a large lift for visitors, disabled people and to shift big exhibits between floors.
The new building, similar in size to the existing gallery, would be separate from the old building but be linked on all three storeys by a glassed area.
It includes a large, double-height gallery, other smaller galleries, climate-controlled storage for collections, public rest areas, toilets, large teaching space, new administration space, food preparation kitchen for functions, a meeting room and plant room on the roof, which will be at the same height as the existing gallery.
A tentative timetable has the project completed in 2012.
Approval from the council to call tenders is scheduled for December, with construction starting in May next year.
Gallery director Warwick Smith admitted raising the money would be a challenge.
However, "significant funders" had already been identified and the project brought to their attention.
"I am confident we will be successful," Mr Smith said.