The Royal Shakespeare Company is to revamp its Stratford-upon-Avon theatre, moving its stage so the audience sits around it rather than in front of it.
The Royal Shakespeare Theatre was under threat of demolition
A new "thrust stage" is part of a £100m plan to expand the facilities at the Royal Shakespeare Theatre, while maintaining its key art deco features.
The Company had originally planned to knock down the 1932 building, but decided against it after protests.
The RSC is now looking for an architect and funds for the project.
Artistic director Michael Boyd said: "Most major new theatres of the last century have moved away from the 'us and them' style of the 19th Century, in search of spaces which celebrate the interaction cinema can't achieve.
"Our commitment to bring an immediacy and clarity to Shakespeare means we need to bring the audience to a more engaged relationship with our actors.
"The best way we can achieve this is in a bold, thrust, one-room auditorium - a modern take on the courtyard theatres of Shakespeare's day. Actors, directors and audiences alike want a more intimate experience than the current RST can offer."
Dame Judi Dench was among critics of the original plans
The building's art deco facade, foyers and "fountain staircase" which links the stalls and circle bars will be kept, while the Victorian gothic exterior of the former 1879 Memorial Theatre - partially destroyed by fire in 1926 - will also be preserved and restored.
The RSC is planning to apply to Arts Council England and Advantage West Midlands, the region's development agency, for funds to help with the design phase.
Dame Judi Dench, an honorary associate artist with the RSC, was among critics of the original scheme to build a "theatre village" on the site.
On Wednesday, she said: "As someone who has played all the RSC theatres, it seems to me that what the company has now found is a brilliant way of retaining the original building while constructing a new theatre inside it - which will work wonderfully for actors and audiences alike."
"It's a spectacular idea which has my full support."