The idea has been floated by St Matthew's rector Father Peter MacLeod-Miller and follows the Wangaratta diocese resolving its dispute with Albury Council over land in the square.

The council and diocese had been at loggerheads over the value of land being acquired by the city as part of consolidating the square.

The council had moved to compulsorily acquire the 1355 square-metre site at the rear of the church after the diocese rejected its offers.

However, following talks a deal has been flagged with the price expected to be kept confidential.

The Valuer-General had recommended a value of $500 a square metre.

In backing a development application for the land at December's council meeting, past mayor Kevin Mack welcomed the progress.

"This will be certainly resolved in the new year and we'll be able to get on with business as usual," he said.

"It's been a trying process and I believe the staff have worked exceptionally well to work their way through it."

Father MacLeod-Miller said he believed the opening of the MAMA gallery had provided impetus for a "happy resolution".

"It's a little bit like living together before getting married, the thing is working and it's just a matter of getting a piece of paper," Fr MacLeod-Miller said.

A gate at the side of the church, linking it to QEII Square, has been shut since construction on the gallery began.

Fr MacLeod-Miller said it was now planned to re-open it and he wanted it to be a feature.

"I would like to think it would have some sort of artistic and architecturally inviting – possibly challenging – and hopefully welcoming archway to say that this is a community space, this will do you good to come through here," he said.

"We're looking at ways of relating the church and the Kiewa Street part to QEII Square and the art gallery."