The council is looking at redeveloping the Forrester Gallery to house the North Otago Museum, which is at present in the two-storey Athenaeum on the corner of Thames and Steward Sts.
It has asked for feedback from the public on the estimated $4.5 million project listed in the council's 2015-25 Long Term Plan (LTP).
At this stage, the council has not made a decision on what to do with the Athenaeum if the project goes ahead, community services group manager Thunes Cloete said.
Options had been discussed, including selling the building with caveats to protect its Heritage NZ category 2 status.
There were also other options, including using it for another purpose or renting it out.
''This is one of the points to be discussed if the community has given us the green light [in the LTP consultation] to go ahead with the project,'' he said.
A cultural facilities redevelopment plan was originally proposed three years ago, with initial costs between $7 million and $10 million.
The latest proposal has reduced that, with the council contributing a third and the remaining two-thirds sought from other sources of funding, including from the Lottery Grants Board.
The classical-styled Athenaeum was designed by architect Thomas Forrester, responsible for a lot of Oamaru's heritage buildings.
It was built as the Oamaru Athenaeum and Mechanic's Institute and opened in 1882.
Mechanic's Institutes were established in the 19th century as voluntary educational organisations and athenaeums were essentially subscription libraries, existing as something between a public and a private organisation.
By the 1950s, the growth in population meant a new library was needed, but it was not until 1974 that work began, with the old Pioneer Gallery being demolished and its collection moved to the Athenaeum to become the museum.
