The Pier Arts Centre underwent a major refurbishment

The �25,000 Royal Incorporation of Architects in Scotland (RIAS) Andrew Doolan Award honoured the design by Reiach and Hall Architects.

The �4.5m centre, based on a pier in Stromness, was one of seven buildings short-listed for the annual prize.

It re-opened earlier this year after a facelift that saw a complete refurbishment of the historic buildings and a new gallery structure.

The award was announced by Culture Minister Linda Fabiani at the Balmoral Hotel in Edinburgh.

Ms Fabiani said: "For a small country, we have a history of punching above our weight - having produced architects like Charles Rennie Mackintosh and Robert Adam and wonderful buildings and places such as Glasgow School of Art and Edinburgh's New Town.

"I have been delighted to see the strength of the projects shortlisted from all across the country, and, from this, I feel very positive about the future of architecture in Scotland."

Other buildings on the shortlist included Princess Gate, a housing development in Edinburgh, and the new arts faculty building for the University of St Andrews.

The jury was particularly impressed with the Pier Arts Centre because of the seemingly effortless way in which the new gallery has been settled in beside its neighbours Douglas Read

Previous winners of the award have included the Scottish Parliament in 2005 and Maggie's Highland Cancer Care Centre in Inverness last year.

Jury member Douglas Read said: "The jury had considerable debate in cutting the 20 entries down to the short-list of seven. That this should be so is a tribute to strength of Scottish architecture today.

"The jury was particularly impressed with the Pier Arts Centre because of the seemingly effortless way in which the new gallery has been settled in beside its neighbours as an integral part of the townscape."

The Pier Arts Centre first opened in 1979 to provide a home for its art collection and space for temporary exhibitions.

It houses a large collection of 20th Century British art, including key works by Barbara Hepworth, Ben Nicholson and Naum Gabo.