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The annual award offers an artist, musician or writer the opportunity to spend two months at an Auckland park homestead, creating work reflecting local landscape.
Kelly is the first jeweller to win the residency, at Scandrett Regional Park, near Warkworth, from mid-October to mid-December.
''We loved Lynn's work because it delivers detail, colour, texture and form in small meticulous packages, which we believe will encourage people to look closer,'' Auckland arts, culture and events committee chairman Alf Filipaina said.
''Lynn's pieces are not only beautiful, and wearable, but they appeal to our sense of nostalgia.''
Kelly's works often reference New Zealand botanic and colonial heritage. She completed a certificate in horticulture and worked as a gardener before taking up jewellery 26 years ago.
''I'm very excited. It's a wonderful opportunity,'' Kelly said this week.
''I don't know what I'll be doing there yet. It's a case of looking at the plants and sea life and the history of the homestead and seeing how it inspires me.''
Scandrett Regional Park would give plenty of inspiration, Auckland regional park ranger Sue Hill said.
''Scandrett has an array of creatures and features that park visitors often overlook. Whether it's crabs under the rocks, amber in the fallen trees, or shells and fish bones littering the shore.''
Jewellery made during the residency will be exhibited in Auckland and then toured.