Art for Guernsey has received a generous donation of £50,000 by the Sarah Groves Foundation.
It will help to fund a Children's Workshop and Gallery in the new arts centre at St Peter Port's Old Quarter.
The workshop and gallery will allow children and schools to host presentations, meetings and workshops.
Another £15,000 will help with running costs.
Sarah was travelling through Kashmir in April 2013 when she was stabbed to death on a houseboat.
She was an artist herself and went to the Chelsea College of Art and so it forms part of her Foundation's values which has been set up in her memory.
Vic Groves, Managing Trustee of the Sarah Groves Foundation, said: “Our mission is to fulfil Sarah’s ambition in life: to enhance young lives.
"One way to do this is through art, and the gallery in Mill Street will be open to all and give children the opportunity to learn and develop their passion for art.
“This project will leave a positive legacy from which Sarah's name will be remembered.
"This gallery will be a massive boost for the arts in Guernsey and will be something in which Sarah would have participated herself and of which she would undoubtedly be very proud.
"We hope to be associated with this wonderful project for many years to come.”
Art for Guernsey also want to create the Art for Guernsey Academy which let students use equipment to get ready for art school or an artistic career.
David Ummels from Art for Guernsey said: “We are delighted to call this wonderful gallery home.
"It is at the very heart of the Old Quarter, and we thank the Sarah Groves Foundation for their very generous donation.
“This space will be a key asset for the visual arts in Guernsey, and also a very welcoming creative platform for the community and a key educational asset for us to accelerate our engagements with local schools and provide local art students with the environment that they need to thrive.”