New community facilities are to be built for people in Shepton Mallet after a decision was taken to develop part of the Commercial Road car park.
Shepton Mallet Town Council wants to build a civic building, offices and a community hall on Old Market Road.
There are also plans for a Community Advice, Training and Employment Centre (CATEC) on the same site.
Mendip District Council has agreed the development can go ahead and the work is expected to be complete by 2010.
"We believe that developing this area would really benefit the community of Shepton Mallet," said Shepton Mallet ward councillor Paul Treby of Mendip District Council.
Shepton Mallet Town Council moved from its Great Ostry offices four years ago to temporary buildings at the district council Cannards Grave site.
"Since then we have been looking to secure permanent buildings which will provide a focus for the community here in Shepton Mallet," said Town Council chairman Bob Champion.