Taunton's Brewhouse theatre, which closed last February, is expected to open its doors again next spring after Taunton Deane Borough Councillors agreed to award the lease to a community group.
The council, which owns the freehold, acquired the lease and contents from administrators last October, and now the executive committee has agreed to hand the lease to Taunton Theatre Association Ltd.
The theatre is seen as a vital part of the county town's cultural life. But the decision to award the lease was only taken after the council was satisfied with TTA's business plan.
Arts consultants employed by the council have worked with TTA to ensure the plan will deliver a financially sustainable future and a varied programme with amateur and professional productions and work with schools and colleges.
The council has historically awarded annual grants to the theatre and £152,000 was awarded in the current financial year. The 2014-15 budget has not yet been set.
Councillor Norman Cavill, who holds the economic development and the arts portfolio, said the theatre was "vitally important" to the town's cultural scene and praised the association's hard work.
In a statement the association said the "fine details" of the agreement were to be negotiated but it was anticipated the doors would open in April 2014.
"We're especially pleased that a number of performers and performing companies have been in touch to say they want to return to the Brewhouse," a spokesman for the association said.