Work on the Turner Contemporary gallery in Margate is set to begin in October after the project received over £8m in funding.

The new gallery will celebrate the links between the seaside town and artist JMW Turner, as well as exhibiting contemporary art.

Arts Council England (ACE) has provided £4.1m towards the project, while the South East England Development Agency (SEEDA) has contributed £4m. It will add to the £6.4m that Kent County Council has already committed towards the £17.4m development on Margate's seafront. The remaining £2.9m is expected to come from the private sector.

Sally Abbott, director of arts at ACE South East said: "This will be a landmark building representing a huge achievement for artists and arts development in the south east and beyond."

Planning permission for Turner Contemporary was granted in February, and work is currently ongoing to find a contractor to work alongside architect David Chipperfield on the development. The two-storey project is scheduled to be completed in 2010, and will feature 750sq m of gallery space together with an artist's studio and multifunctional space for screenings and other events. A cafe and shop are also among the plans.

Mike Hill, Kent County Council cabinet member for community services, said: "The Arts Council and SEEDA have been supportive of everything that we are trying to achieve with Turner Contemporary since the outset. These funding agreements demonstrate our partners' confidence in the project and the impact it is going to have on the whole area."

Earlier this month, former editor of New Statesman John Kampfner was appointed as chair of the Turner Contemporary Operating Trust. Kampfner will be responsible for recruiting a full board and overseeing the transfer of operations from the council to the Trust.

The project had originally been scrapped in 2006 due to spiralling costs.