This is the second time the gallery has been shortlisted for the award - the world’s largest and most prestigious prize for museums - since opening in 2011.
Simon Wallis OBE, director of The Hepworth Wakefield, said: “We are so delighted that our work throughout our fifth anniversary year has been recognised by being shortlisted for this prestigious and coveted prize.
“Last year was an exceptional year for The Hepworth Wakefield because of the number and variety of people we welcomed to experience our ambitious and intelligently popular exhibitions, valued learning opportunities and engaging public events.
“In particular, we are proud of the successful launch of the first Hepworth Prize for Sculpture, which did so much to reaffirm and extend Yorkshire’s position as the home of British sculpture.
“It’s a great honour for the whole team at the gallery, and for the city of Wakefield, for our work to be nominated for Art Fund Museum of the Year 2017.”
The other finalists are: The Lapworth Museum of Geology in Birmingham, The National Heritage Centre for Horseracing & Sporting Art in Newmarket, Sir John Soane’s Museum in London, and Tate Modern, also in London.
The winning museum will be announced at a ceremony at the British Museum on Wednesday, July 5 and will receive £100,000 to use to benefit wide audiences.
For the first time, each of the shortlisted museums will receive £10,000 as recognition of their achievements.