Five museum and gallery partnerships have won a share of the £5m Art Fund International pot to fund the creation of collections of international contemporary art over the next five years.

Stephen Snoddy, the director of the New Art Gallery Walsall, which received one of the five £1m grants, described the announcement as "marvellous news". "We are absolutely over the moon," he said. "It felt like a lot of work, but it was worth it."

The gallery is working in partnership with Birmingham Museum and Art Gallery and the Ikon Gallery on the theme of "the metropolis".

"The reason we gave it that theme was because the Midlands is the home of the industrial revolution and the New Art Gallery has a collecting policy around urbanisation," said Snoddy. He added that he hoped that some of the new works would address the cultural diversity of the region.

The international scheme came out of the Art Fund's centenary celebrations in 2003. David Barrie, the director of the fund, said discussions at the time had brought into focus the failure of regional museums, in particular, to collect work produced by living, non-British artists.

Ben Harman, curator of contemporary art for Glasgow Museums, another beneficiary of the grant, agreed that in the past it had been difficult to find money for international collecting. "It feels as if we are starting a new international collection," he said. "It's an exciting opportunity."

Harman added that Glasgow's contemporary acquisitions budget had been cut from £70,000 a year to just £15,000 when the museum service moved to trust status earlier this year.

He said that applying for the Art Fund grant had helped the governing body realise the need for the contemporary art acquisition budget. The contemporary collecting budget, to be spent on UK artists, is now back up to £75,000 a year.

Most of the partnerships have said they won't begin collecting for at least six months, after a period of research and development.

"We hope to start purchasing by this time next year," added Harman. "It will be work by emerging and established artists -and we hope to have 30 to 50 works at the end of it."

All the acquisitions will have to be approved by the Art Fund before the money is released.

There was also some consolation for the losers. The chairman of the Art Fund, David Verey, said that approaches from the remaining candidates for individual purchases of international contemporary art would be looked upon favourably.

Bristol Museums, Galleries and Archives/Arnolfini: looking at globalisation and migration.

Gallery of Modern Art, Glasgow/Common Guild: establishing an international context for the gallery's recent acquisitions of Scottish art.

Middlesbrough Institute of Modern Art/The Drawing Centre, New York: collecting drawings by artists based in North and South America.

Towner Art Gallery, Eastbourne /Photoworks/ Brighton Photo Biennial/Artsway: collecting art that reflects on physical, social frontiers or national boundaries.

Birmingham Museum and Art Gallery/New Art Gallery Walsall/Ikon: "the metropolis".