The city of Melbourne is aiming to secure itself as Australia's culture capital, with the development of the country's largest contemporary art gallery and its tallest building.

To be built next door to the National Gallery of Victoria as part of a new arts precinct, the NGV Contemporary site would be developed at a cost of AU$151m (US$115mm, €98.5m, £86m), replacing the former Carlton & United Brewery. Victoria State will invest AU$208m (US$158m, €135.6m, £118.5m) through the first two years of the project, allowing the NGV to raise philanthropic funds and become sustainable.

The redevelopment will create 18,000sq m (194,000sq ft) of public space, as well as a centre for smaller arts organisations and a pedestrian corridor with bars, restaurants and green space.

"The National Gallery of Victoria is one of the world's top 20 contemporary art museums and now we'll have an opportunity to have a dedicated contemporary art facility," said Creative Industries minister, Martin Foley, who added that it would cement the state of Victoria as a global leader in the arts.

Also in the city, the skinny Sky Tower skyscaper has been put forward, with the 330m (1,082ft) twisting structure proposed as Australia's tallest tower.

Conceived by DeciBel Architecture, the plot on which the building stands will be about half that of a full-size tennis court, with the width to height ratio at 26.6:1, making it one of the world's most slender towers. The multiple rotations in the design have been done to avoid wind shear, allowing the slender structure to remain standing. At its peak, the tower would have a viewing deck.

Australian developer Grocon is behind the tower, with plans to use most of the building's profits to create an endowment fund for science institution the Royal Society of Victoria (RSV), which prior to the site's commissioning hosted a weather observation facility there.

The Sky Tower is scheduled for completion in 2022. The NGV Contemporary has been set an opening date of 2024.