The former Wrigley's site on Williton's Roughmoor Business Estate is to be transformed with £1.75m to provide space for new firms.
West Somerset Council will put up 55% of the total cost with the remaining money coming from European funding.
"The council has had a number of enquiries from businesses wishing to move to the area or expand here," said Councillor Nick Messarra.
The council aims to develop a network of workspaces across the district.
"It's one of the first tangible steps towards realising the council's vision. We are also reviewing other sites across the district which may have potential for commercial development," he said.
The brownfield site - made up of buildings from the 60s, 70s and 80s - will be turned into a workspace split in to 14 units to be let on a leasehold basis. Space will also be provided for a meeting room with internet connections.
"With the closure of Wrigleys, the site has become an eyesore and this is a fantastic opportunity to redevelop it," said ward councillor Eddie May.