The new Art Gallery of Saskatchewan is being promoted as part of destination centre for the River Landing development. It will be adjacent to a new peforming arts theatre. (CBC)

The City of Saskatoon has agreed to build a new art gallery at a cost of $58 million.

The gallery will be the new home of the existing Mendel Art Gallery, but after the move it will have a new name: The Art Gallery of Saskatchewan.

The location will be part of a new development in Saskatoon known as River Landing.

Proponents of the move say the new space will be larger, and allow the gallery to show more of its collection.

"Our [current] building has certain capacity limitations," Vincent Varga, the executive director of the Mendel, told CBC News: Some of the gallery's larger works do not even fit in its freight elevator.

However, the move and name change, which was approved by city council Monday night, is not going over well with everyone.

"A lot of the people around the Mendel are very upset by it," Beverley Caldwell, a longtime volunteer at the gallery, told CBC News. "I think that you will see the end of the present volunteer program because its not true to the nature of the Mendel."

The chairman of the gallery board, Art Knight, said they tried for four years to get money for a renovation job, without success. However, when the board agreed to move into a new space, things changed.

"The end result is after four years of trying to get money for this location, in four months we had $30 million to build a new gallery," Knight said.

Documents submitted to city council show the entire project will cost $58 million, which includes a $7 million underground parkade with 250 stalls. The new gallery is expected to open in December, 2014.