Work on the centre includes upgrading the cottages
A grant of £2 million is set to revive the national language and heritage centre at Nant Gwrtheyrn in Gwynedd.
The money will be used to update the accommodation used by Welsh learners who attend residential courses, and create 27 new jobs.
The cafe will also be upgraded to enhance the facilities for conferences and weddings.
Around 25,000 people have attended courses at the Nant since it first opened in 1982.
Dr Carl Clowes, the chairman of the trustees, said it was important to upgrade the facilities.
"With this money we hope to revive the village by upgrading the facilities," he said.
Deputy first minister Ieuan Wyn Jones said the money was made up of European funding and money from the National Assembly Government, as well as money raised by the Nant itself.
"The idea is that this money will see an improvement of the economy of the area," he said.
"The Nant have brilliant ideas as to how they want to see the centre develop and this money will also see more jobs from the current five to 32 by the end of the redevelopment," he added.
Mr Jones said the basis for the centre was to teach Welsh to adults on residential courses, but people's expectations had changed over the years.
"People now expect better facilities, and so part of this money will go to improve the cottages used as accommodation," he said.
"The Nant is in a fantastic location, and of course the facilities can be used by other visitors to the area, when the language centre do not need them," he added.