The St Albans Museum and Gallery project has been awarded a £2.5 million grant from the Heritage Lottery Fund.
The money, combined with a previous £300,000 award, will provide around a third of the £7.75 million cost of the scheme.
CllrAnnie Brewster, portfolio holder leisure and heritage at St Albans District Council, said: “We are both delighted and honoured the Heritage Lottery Fund is giving this flagship City project its prestigious backing.
“We want to create a fitting cultural beacon right in the heart of our City for all to access freely. In 1831 The Town Hall and Courthouse was built for public use.
“We are now well on our way to creating a new landmark museum and art gallery with three floors of galleries and exhibition space for residents and visitors to enjoy.”
It is the second major decision in support of the Museum and Gallery project.
That recommendation has been sent to the Secretary of State for Communities and Local Government, Greg Clark, for consideration. He is due to announce his decision by mid-January.
If his approval is given, construction work could start as early as Spring of next year with the Museum and Gallery scheduled to open in autumn 2017.
The scheme to convert the Town Hall, a Grade II* Listed Building, into a new museum and gallery has been in development since 2012 in a partnership between the council, St Albans Museums and Galleries Trust and the University of Hertfordshire.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here