Council has endorsed change to structure of the Shepparton Art Museum (SAM) budget.
Last night, they gave the green light to a proposal to use capital works funds rather than take out a loan for the building of the new SAM.
The new estimate of $39.9m for the project is $5.35m increase to the original plan.
Sticking with the original budget, the Great Shepparton Council say, it would have limited functionality and requiring further future investment to be operational.
"This is a significant building for Greater Shepparton and in order to have the functionality required for an international standard art museum there is no ability to compromise on design and fit out."
The controversial project was endorsed in 2015, with concern from the public that the funds should be better spent elsewhere.
The project build will begin later this year, with completion set for 2020.