The unit's future was in doubt after the hospice lost the money
A children's hospice forced to suspend vital services after losing £5.7m when an Icelandic bank collapsed has been awarded a £1.5m government grant.
Naomi House, in Hampshire, lost the money it needed to fund Jack's Place, a specialist facility for sick teenagers.
Public donations have also helped towards its £4.5m annual running costs.
Professor Khalid Aziz, its chairman, said: "We are back to where we were, we have our £5.7m back. It's all full steam ahead once again here."
The hospice provides respite care to children and young people whose conditions mean they are unlikely to reach adulthood.
Tina Baker, who brings her young children Hannah and Lewis to Naomi House for two weeks a year, said: "We can come and totally relax and the children get spoilt and to do things they can't normally do like ice skating.
"We were also very concerned it [the lost money] would affect our coming and staying in our respite - it's the only proper break we get in a year."