The Royal Shakespeare Company has secured more than £100m for its plans to redevelop its theatres in Stratford-upon-Avon, Warwickshire.
It is hoped the theatre will be completed by 2010
The company (RSC) made the announcement after the district council said it would support the company's proposals.
Plans include a three-sided open stage for the 1,000-seat main theatre and a new tower overlooking the town.
The plans now have to go before the government before planning permission can be given.
It is hoped the transformation will be completed by 2010.
The world-famous Royal Shakespeare Theatre building, which opened in 1932 and is listed, held its final performance, Coriolanus, on 31 March before closing.
The new auditorium will incorporate the facade of the 1932 theatre.
The funding has come from partnerships with the Arts Council England and Advantage West Midlands as well as gifts totalling £22m from private philanthropists.
These gifts have led the company to extend its original £100m plans to £113m, including a rooftop restaurant overlooking the River Avon as well as creating more space for staff.
But the company said it would need to raise a further £12.8m through a public appeal to cover the extra costs.
Work on the site is set to start on 30 April. The Courtyard Theatre will become the RSC's main home until the new theatre opens.