Tourists will walk around the SS Great Britain
The National Lottery stepped in after being warned Isambard Kingdom Brunel's iron masterpiece, preserved in Bristol docks, would "disappear" in 20 years.
Without emergency protection, it would be beyond saving in only five years.
Now the hull of the ship is to be sealed under a glass plate covered with water, to shield it from Bristol's corrosive air.
The false surface was devised to make it appear to be floating in its dry dock - then engineers said the water would help control the atmosphere.
Much of the ship's hull had rusted to a thickness of only 1mm or 2mm when the ship's trustees began appealing for money to save it.
"There are many places in the hull where there are holes," said curator Matthew Tanner.
"But in other places there is 20mm of iron."
The new scheme includes an ingenious access for disabled visitors, with a lift shaft hidden in the funnel.
Historic dock
Sightseers will be able to walk "underwater" beneath the glass seal.
The Heritage Lottery Fund is giving £7,740,000 to conserve the ship and restore the historic appearance of the Great Western Dock.
The SS Great Britain, launched in Bristol in 1843, was the world's first ship with a screw-driven propeller.
It served as a liner, then carried emigrants to Australia and troops to the Crimean War.
It ended up as a floating woolshed on the Falkland Islands, in the South Atlantic.
Floating feast
Many thousands of people turned out to see the ship's hulk towed up the Avon Gorge to its Bristol birthplace in 1970.
But gradual restoration - including fitting the ship out for banquets - has not kept pace with the spread of rust, Mr Tanner told BBC News Online.
"We were saying to the Lottery people, it may look terrible, but there is still a lot of ship there.
"if we leave it, in five years' time it will be half that."
The false water surface was conceived without the scientific benefits being realised.
"It was just suggested as an idea to make it look better for tourists, then the engineers said that would be good because it would cool the glass.
"We will have a de-humidifier, but to make that efficient we need the glass to be cold."
A regulated system will pump water from the docks to control the temperature over the glass.
Normal ship maintenance methods would not have saved the ship, said Mr Tanner.
"With dockyard treatment, it would effectively disappear in 20 years.
"The work we plan should give us 100 years."