The Australian and NSW Governments have joined forces to help fund a major makeover and upgrade of Sydney's iconic Museum of Contemporary Art (MCA) - to help it attract international exhibitions for the Asia-Pacific region.

Federal Infrastructure and Transport Minister, Mr Anthony Albanese said as part of the redevelopment the MCA would become home to a new world-leading arts educational facility, reinforcing its reputation as one of Australia's great art icons.

"The new National Centre for Creative Learning will harness the power of the Internet and online technologies to bring Australian artists into classrooms right across the country," said Mr Albanese.

"This project is what our Economic Stimulus Plan has been all about. It will create 219 construction jobs as the economy recovers from the biggest global downturn in 75 years while leaving a lasting legacy for the community."

The $53 million upgrade is being jointly funded by the Australian ($13 million) and NSW ($13 million) governments, with the balance coming from the Museum itself and private donors - including $15 million from the Chairman of the MCA's Foundation Simon Mordant and his family.

Premier Kristina Keneally said the NSW Government funding was critical to the development and would enable the MCA to rival modern art spaces such as New York's Museum of Modern Art (MoMA) and London's Tate Modern.

"The visionary redevelopment of the MCA will create enhanced opportunities to attract and compete for the best possible exhibitions and artists," Ms Keneally said.

"It will also allow the MCA to offer state-of-the art educational experiences to young people in Sydney, across the State and Australia.

"The MCA's planned sculpture terrace - with a vista of our magnificent harbour -will rival the best art spaces in the world.

"Not only will we be on the international art gallery map and accessible to thousands more international visitors and artists - but we will also be more accessible to the people of NSW and Australia, especially those with a disability.

"I am proud to be part of this wonderful announcement and look forward to seeing the benefits this redevelopment will deliver to Sydney, NSW and Australia."

As well as being equipped with state of the art communication facilities, the new National Centre will house a 110 seat multimedia theatre, an artists' resource centre, new galleries and art education spaces, a rooftop cafe and sculpture terrace, and accommodation for the Bella Program for children with special needs.

Federal Arts Minister Peter Garrett said today's announcement opened an exciting new chapter for the MCA.

"Today we see the MCA realise an ambition to create an incredible new resource for the growing numbers of people who come here, fired up with enthusiasm, to learn, understand and experience cutting edge and modern art forms," said Mr Garrett.

"Importantly, this Centre has been made possible not only by government contributions, but also by a landmark act of philanthropy, demonstrating how collaborative relationships between governments and generous citizens can deliver real benefits to our outstanding arts institutions."

Work is expected to commence as early as next month and be complete by early 2012.