Scottish culture minister Michael Russell has revealed that the long-awaited establishment of Creative Scotland, the new national cultural development organisation, is expected to cost £3.3m.

Addressing the Scottish Parliament on 2 April, Russell revealed that the agency, which will support and develop Scotland's creative industries, is set to be formally established in 2010 and will replace the Scottish Arts Council (SAC) and Scottish Screen (SS). The Scottish government is expected to meet the full cost of establishing Creative Scotland, which is being led by Ewan Brown and the board of Creative Scotland 2009 Ltd, working with the joint board and chief executives of SAC and SS.

Russell said: "Creative Scotland will be much more than the sum of its parts and as such this is not just a transition, it is a transformation. This means taking the best from the Scottish Arts Council and Scottish Screen and creating a unified body with skilled, confident leadership from the sector's best. "We will create a new force and set a national standard for a vibrant, forward-thinking development body that will empower and enrich our creative talent for generations to come."

Plans to establish the new Creative Scotland agency were first put forward by previous culture minister, Linda Fabiani, whose 20-month tenure in the position was overshadowed by the Scottish government's failure to back the scheme in July last year. However, Russell – who replaced Fabiani in a government reshuffle in February – now believes that the project is back on track, although the scheme will be subject to further government scrutiny before the agency can be established through legislation.