The decision, announced on Tuesday morning, will help make the Shrewsbury Entertainment Venue become a reality.

Shrewsbury and Atcham Borough Council can now buy the final piece of land for the project at Frankwell Quay.

Building work will begin in the summer and the theatre is expected to open within the next three years.

New facilities planned include a 650-seat main auditorium, a 250-seat studio theatre, a dance studio, function rooms and a cafe bar with terraces overlooking the river.

'Economic regeneration'

The council has already granted the project planning permission.

Councillor Charles Armstrong, portfolio holder for culture and leisure at the council, said: "The funding we are getting from Advantage West Midlands is very important for economic regeneration - not just culturally.

"It is showing that nationally people are recognising that what we are doing is the right way to drive the town forward for the next 50 years.

"The new entertainment venue is just one of several key developments that will improve our cultural assets."

Mark Pearce, Shropshire Director of AWM, said the aim was to make Shrewsbury a centre for "multi-cultural and economic activities" in Shropshire.