Architecture graduate Shirley Ka Sin Leung, 23, has drawn up plans for two buildings, with glass walls and roofs, inside the main halls of the Bishop's Palace at St Davids.
She says the gallery would be an ideal home for the paintings of Pembrokeshire-based artist Graham Sutherland.
The works are currently in storage.
Miss Leung's idea adds to a growing debate over whether Wales' historic buildings should be preserved unchanged or gain modern additions for better facilities or a new function.
Traditionally Welsh castles and abbeys are presented as roofless, windowless ruins and visitors enter through basic huts. But the new up-to-the-minute visitor centre in Caerphilly Castle broke the mould and has been well received by the public, despite the contrast with the castle's bare stone walls.
Modern visitor centres are now under consideration for other sensitive historic places, such as the National Trust's Aberdulais Falls, near Neath.
In the early 1980s plans for a huge glass pyramid in the courtyard of the Louvre art gallery in Paris triggered a heated debate. The 70ft-high building was completed in 1989 and is now an unavoidable feature of the gallery, which occupies a former fortress contemporary with the Bishop's Palace.
Miss Leung's concept for St Davids was criticised by a prominent local historian yesterday but applauded by some architects as an imaginative new use for a building that lost its original function during the Reformation.
Patrick Hannay, one of Ms Leung's tutors at Uwic, said, "We still appear to prefer our ruins untouched in order to dream of what might have been, instead of balancing that with new inspiration for what could be."
And he questioned whether the planned new gallery might be too timid.
"Shirley has proposed instead the ruins of the Bishop's Palace, leaving the walls untouched and still largely open to the sky. This palace, stripped of its 200 sculptures at the Reformation, could once again be filled with art."
But Pembrokeshire historian Dillwyn Miles, 88, author of 20 books on history and the National Eisteddfod, objected to the proposed gallery. As a friend of Sutherland, who died in 1980, Mr Miles once helped the painter search for a new venue to display his work.
"The palace should be preserved as it is," Mr Miles said. "Nothing should interfere with its present beauty and the memories that it evokes of what happened at the Bishop's Palace."
Mr Miles said the Caerphilly visitor centre was different because it occupied only a small part of a large building. But there was a risk many other buildings could receive modern additions.
"I'm afraid I would be against it," he said. "Once you interfere with these old buildings, they're no longer what they're meant to be."
Miss Leung, who lived in Hong Kong until she went to an English boarding school at the age of 14, said she was inspired by Coventry Cathedral, where a modern building combines with remains of the original cathedral bombed in 1940.
"The Bishop's Palace is an exhibit itself already," said Miss Leung, who is now studying for an MA in interior design. "You might as well use it as a gallery.
"People can appreciate the building and his paintings at the same time. It would be nice to integrate the two. Hopefully someone will do it."
Michael Davies, the architect responsible for the Caerphilly Castle visitor centre, said, "The best use for any public building is its original use, but we have to face up to the fact that you can't get the original use for many buildings.
"Sometimes as conservationists we do face a battle convincing other people that it's OK to alter old buildings. By making alterations, providing you make the correct ones and sensitive ones, you're breathing new life into the building and extending the life of the building."
- Old Master
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I was in WB Yeats parish Church in Sligo Ireland recently and the original plaster was stripped from the walls to give it a more contemporary feel. It worked
- PVC King