More than 1,300 homes will be built on the garden site
Part of Liverpool's International Garden Festival site, which has been derelict for 25 years, is set to be restored to its former glory.
The North West Development Agency (NWDA) is giving developer Langtree £2.1m which will allow it to restore the formal gardens area.
Once completed, the gardens, which were originally opened by the Queen in 1984, will be reopened to the public.
Langtree said it still hoped to build homes on the site within five years.
In addition to the development agency cash, the firm is also under consideration for a further £1.6m from the Northwest European Regional Development Fund (ERDF).
It means the site's Japanese and Chinese gardens, lakes and woodland sculpture trails will all be restored.
Flo Clucas, deputy leader of Liverpool City Council, said the grant for the site, near Otterspool, was "very good news".
"I think that when it is done it will be enormously beneficial for that part of the city and I think will attract visitors and guests from a wide range of areas."
Plans for the £250m redevelopment, which also includes more than 1,300 homes, were approved after a public inquiry last year.
The project was placed in doubt when building firm David McLean, a partner in the development with Langtree, was hit by the recession.
The festival hall, built for the 1984 event, has now been pulled down
But Langtree has said it remains committed to the site.
Managing director John Downes said: "The grant we are finalising with the NWDA will allow us to not only bring forward the timescale for the restoration of the formal gardens but also accelerate delivery of the residential development.
"The agency's investment will also cover the management and maintenance of the park for five years, within which time it is anticipated that we will be able to commence development on the balance of the site and secure its long-term future."
The 1984 International Garden Festival was billed as a "five-month pageant of horticultural excellence and spectacular entertainment".
Described by some visitors as surpassing Capital of Culture year, it contained more than 60 individual gardens, a Festival Hall, public pavilions and miniature railway.
But once the five-and-a half-month festival was over, the site changed hands a number of times and fell into disrepair.