Greg Anderson, the gallery's senior curator, said the gift from the foundation was "wonderful news" for the campaign.
"It's another major Wanganui trust which is sharing the vision of what we're trying to achieve with the Sarjeant project," Mr Anderson said.
He said the foundation's input was the sort of impetus that was vital for the project.
"But this hasn't happened by chance. We've been working to a strategy and it's paying off. We're confident we'll get to the target as long as we follow the strategy we've got in place."
He said this latest grant would help the gallery match the $10 million in funding which has been set aside for it through the Ministry for Art, Culture and Heritage's Regional Museums Fund.
Wanganui mayor Annette Main said the Whanganui Community Foundation's grant was crucial.
"I am extremely pleased that the Community Foundation has made this commitment. It's a very clear signal that they strongly support this major council project and that they see the Sarjeant as being key to the growth and development of our city," Ms Main said.
Ms Williams said the challenge for the trust was daunting but the fundraising was on track.
"We know the challenge we have, but we're tackling this. We wouldn't be here doing this if we didn't believe in it," she said.
She said to get large corporates and philanthropists to contribute, it was essential to see good local support.
The next step is to launch the Sarjeant business partners' initiative which happens later this month and details of that will be released shortly.
"But again its aimed at showing that business leaders in the wider Wanganui region are supporting the project," Ms Williams said.
Also in the pipeline is a national media campaign.
