The development would transform Union Terrace Gardens

The centre is expected to attract about 200,000 visitors a year and bring about �5m annually into the local economy.

The money is coming from the Scottish Arts Council which will provide capital funding for the centre.

The �13m development, dubbed the "Northern Light", is the result of a partnership between Aberdeen City Council and Peacock Visual Arts.

It is planned as a centre of excellence which will attract some of the world's finest contemporary artists to come and work and exhibit in Scotland.

The announcement was made just before the opening of the Glasgow Art Fair where the model of the new building is on display.

The Scottish Arts Council is the first of three major funding decisions. News about an Aberdeen City Council loan and grant from Scottish Enterprise Grampian are to follow.

The new centre will be a beacon of creativity in the north of Scotland and help position Aberdeen on a par with other northern European cultural centres Lindsay Gordon Peacock Visual Arts

The centre will then undertake a capital fundraising appeal to complete the development.

Scottish ministers approved the plans for the centre last month. The building will be located in the heart of Aberdeen's Union Terrace Gardens.

This is the first Scottish development for architects Brisac Gonzalez who specialise in cultural and multi-purpose facilities, including the Museum of World Culture in Gothenburg.

The centre, which is due to open in 2010, will run a host of activities, from exhibitions by world-class artists to community outreach and education projects.

The building will house galleries, printmaking, television and dance studios, workshops and space for music and film screenings.

It is hoped the new centre will help graduates from Aberdeen's two universities to remain in the city by offering opportunities within arts and the creative industries.

Peacock has already received applications to work in the centre even thought it is not due to open for another two years.

'Flagship centre'

A scale model of the centre will be on display at the Glasgow Art Fair which runs from 27-30 March at George Square in Glasgow.

Lindsay Gordon, director of Peacock Visual Arts, said: "We are delighted that the Scottish Arts Council have announced this major piece of funding for the new centre.

"For Peacock, this is the culmination of a 10-year journey which transformed a very respected printmakers workshop into one of Scotland's finest contemporary arts organisations.

"The new centre will be a beacon of creativity in the north of Scotland and help position Aberdeen on a par with other northern European cultural centres such as Copenhagen and Helsinki."

Douglas Paterson, chief executive of Aberdeen City Council, said: "The new centre will give our city a flagship cultural centre and provide Scotland with one of its most exciting cultural developments of recent years."

Iain Munro, co-director of arts at the Scottish Arts Council, said: "The Scottish Arts Council is pleased to support this exciting and inspirational new project in an architecturally sensitive and beautiful new building in Union Terrace Gardens.

"It is a visionary project of local, national and potentially international significance and will be an exciting new addition to Scotland's cultural facilities".