The new deal, part of a £63.8 million financial package for the city’s waterfront, will plug the last remaining funding gap for the long-delayed project.
The new funding from the government, which has previously agreed to stump up £25 million as part of a rescue package for the project, will also pay for wider infrastructure improvements on the waterfront, which is undergoing a £1 billion regeneration.
Dundee’s V&A, the UK’s only design museum outside London, was thrown into chaos just over a year ago when it emerged that its cost had almost doubled to £81 million.
Work got underway last March after ministers stepped in to bail out the scheme, almost eight years after it was originally announced. The attraction is due to open in the summer of 2018.
Officials at Dundee City Council and V&A Dundee today insisted there had been no increase in the overall cost of the museum since then.
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The new deal, announced by Deputy First Minister John Swinney, is based on a model used to kick-start a long-awaited revamp of Edinburgh’s St James shopping centre. The announcement coincided with the first part of the new-look waterfront opening up to drivers and pedestrians.
Wider improvements being made under the new backing will include improvements to the city’s railway station, the creation of a world-class “digital corridor” on the waterfront and the development of two new civic spaces.
Developed by the government’s Scottish Futures Trust, the “growth accelerator model” is based on public finance being ploughed into infrastructure improvements on the basis of predicted returns from business rates.
Mr Swinney said: “The agreement underlines the strength of the Scottish Government’s commitment to Dundee and our desire to help create jobs and grow the economy.
“The nature of this funding model enables investment to be unlocked now that will support development in the area and longer term economic growth.”
A spokeswoman for the Scottish Government said: “The capital cost of V&A Dundee has not increased.
“The additional package announced today includes the £12.6 million remaining funding requirement for V&A Dundee and reflects an apportionment of the council’s assessment of the potential wider financing costs associated with the overall Central Waterfront development.”