By Samantha Lock in Sydney

The annual unveiling of Australia’s most prestigious art prize has kicked off with a portrait of an Indigenous rapper nabbing the staff-favourite award.

Matt Adnate’s dramatic portrait of Baker Boy – Yolngu rapper Danzal Baker – took out the the $3000 Packing Room Prize as finalists in the Archibald awards were publicly revealed on Thursday.

Accepting the honour at the Art Gallery of NSW, the former graffiti artist said he could never have dreamed of clinching such a coveted award after spending the first 10 years of his career “just painting letters”.

Behind him hung the paintings of 57 finalists for the annual $100,000 Archibald Prize, the nation’s premier award for portraiture.

“Growing up as a graffiti artist I never dreamed of being able to even name one of my artworks in a place like the Art Gallery of NSW,” Adnate told AAP.

The rap music fan added that he listened to Baker Boy while he painted.

“When you’re painting, you’re listening to eight-to-10 hours of music a day,” Adnate said.

“He’s an inspirational figure, not only is he an incredible musician but he also won Young Australian of the Year and he’s just in his 20s.”

The finalists included the highest-ever number of Indigenous artists among the cohort selected from more than 1000 entries.

Baker Boy said it was an honour to be included in the collection after his portrait took out the packers’ prize, which has been judged for more than 30 years by gallery staff who receive, unpack and hang the entries.

“Matt’s work tells stories, he captures great strength and vulnerability, but most importantly his work amplifies the voice of those he paints, which is very powerful,” he said.

A total of 138 finalists were announced for the Archibald, Wynne and Sulman prizes on Thursday.

The Wynne Prize recognises either landscape paintings depicting Australian scenery or figure sculptures by local artists, while the Sulman Prize is for subject painting, genre painting or murals.

The winners of the three main prizes will be announced on June 7, with the exhibition running from June 8 until September 8.