A mystery donor has pledged £3m towards the creation of a new arts venue in Edinburgh. The Scottish Community Foundation (SCF), which is overseeing a contest to win the cash, said the new venue was likely to be part of an existing facility. The £3m prize is by far the largest the SCF has ever given.

An SCF spokeswoman said the building must be "of architectural and cultural merit" but that otherwise, the criteria for the use of the winning project were "extremely" broad.

She said applications would be considered from organisations such as dance venues, museums and theatres.

"This will be somewhere the wider community will go and take part in the arts. The only criterion is that it has to stay within the boundaries of Edinburgh. It could be city centre, but we will be expecting something that everyone can visit."

The SCF said it was expecting other funding to accompany the project, and that it was likely to involve the refurbishment of an existing building, rather than a new build.

"We expect most of the applications will be projects that are in the pipeline," said the spokeswoman.

Initial entries must be submitted by 30 April 2009. Those shortlisted will receive up to £10,000 to assist with detailed applications. The winner will be announced in summer 2010.

Two possible contenders are believed to be a medium-sized concert hall and a new cinema to act as a venue for film premieres during the Edinburgh Festival.

The SCF said it did not know whether the donor would emerge once the project was complete. The involvement of JK Rowling and Sean Connery, who supports the idea of a Scottish National Photographic Centre, has been ruled out.