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An old school in Colerne, North Wiltshire, is to be transformed into social housing and a community centre.
The district council has made a grant of �200,000 towards a �500,000 plan put forward by the parish council to redevelop the building.
A second floor will need to be built to create four low-cost one-bedroom flats which will be rented to local people.
The balance of money needed to complete the work will come from the sale of the parish council's original property.
"The community has always wanted to see the old school kept in use, but it's been a question of making the project sustainable and not leaving a burden for others in future years," said Symon Doliczny, chairman of Colerne Parish Council.
"Colerne is going to get its first affordable housing for many years, our playgroup is going to get a home to be proud of and village organisations will have a new venue to use," he said.
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