From Kylie Minogue’s gold hotpants to a 19th century cloak worn by Dame Nellie Melba, costumes worn by Australia’s stars of the stage will go on show at a new museum.

The NZD$3.79 million Australian Museum of Performing Arts is currently under construction inside Melbourne’s Hamer Hall, and set to open in December.

The space will be used to show off the Australian Performing Arts Collection of more than 850,000 costumes, props, posters and other memorabilia.

The treasures include AC/DC lead singer Bon Scott’s leather jacket, Dame Edna Everage’s The Scream Dress, and Divinyls singer Chrissy Amphlett’s tunic.

There’s also a journal by Nick Cave, a model of the Priscilla Queen of the Desert bus, and the puppet Ossie Ostrich from the TV program Hey Hey it’s Saturday.

The museum project started with NZD$541,920 in state government funding with the rest of the budget contributed by philanthropists.

At a media event on Monday, performer Lucy Durack paid tribute to the late Olivia Newton-John with a rendition of her 1978 hit Hopelessly Devoted To You from Grease: The Original Soundtrack.

Behind her was a sparkling red gown from the collection that Newton-John wore to sing for Queen Elizabeth II at the Royal Charity Concert at Sydney Opera House in 1980.

Arts Centre Melbourne chief executive Karen Quinlan said she was hopelessly devoted to the collection, which was established in 1975 and is estimated to be worth almost NZD$86.7 million, but has mostly been kept in storage.

Putting it on show at the museum will inspire people, she said.

“This is the new kid on the block, this is going to be a game changing moment for Melbourne, and I’m really excited.”

The museum will be located on the upper terrace of the Hamer Hall building overlooking the Yarra River.

It will intially have 500 sq metres of exhibition space, and a second phase of construction will see this expand to about 800 sq m.

Ticket prices will be kept low, promised Quinlan, and a program of two exhibitions a year will include international shows.

The museum is part of the NZD$1.84 billion Melbourne arts precinct transformation project, which is slated for completion in 2028.

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